Reliance Steel & Aluminum Co (RS)
Inventory turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 9,858,600 | 9,996,700 | 10,128,700 | 10,162,400 | 10,321,500 | 10,423,900 | 10,886,100 | 11,414,300 | 11,773,700 | 12,038,100 | 11,666,200 | 10,817,000 | 9,603,000 | 8,288,100 | 7,061,300 | 6,129,300 | 6,036,800 | 6,259,900 | 6,721,600 | 7,346,900 |
| Inventory | US$ in thousands | 2,026,800 | 2,205,800 | 2,288,700 | 2,166,900 | 2,043,200 | 2,110,200 | 2,202,300 | 1,981,400 | 1,995,300 | 2,175,800 | 2,352,100 | 2,010,300 | 2,065,000 | 1,877,800 | 1,644,800 | 1,477,000 | 1,420,400 | 1,423,000 | 1,492,600 | 1,630,000 |
| Inventory turnover | 4.86 | 4.53 | 4.43 | 4.69 | 5.05 | 4.94 | 4.94 | 5.76 | 5.90 | 5.53 | 4.96 | 5.38 | 4.65 | 4.41 | 4.29 | 4.15 | 4.25 | 4.40 | 4.50 | 4.51 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $9,858,600K ÷ $2,026,800K
= 4.86
Reliance Steel & Aluminum Co's inventory turnover has displayed fluctuating trends over the past several periods. The inventory turnover ratio, which measures how efficiently a company manages its inventory by indicating how many times inventory is sold and replaced within a specific period, has shown variability in performance.
From March 31, 2020, to December 31, 2024, the inventory turnover ratio ranged from a low of 4.15 to a high of 5.90. The ratio experienced a noticeable increase from March 31, 2022, reaching a peak of 5.90 by December 31, 2022, before declining slightly to 5.05 by December 31, 2023. Subsequently, the ratio trended downward, reaching 4.86 by December 31, 2024.
The higher the inventory turnover ratio, the more efficiently a company is managing its inventory. A consistently high ratio indicates that the company is effectively selling its products and replenishing its inventory at a rapid pace. Conversely, a lower ratio could suggest inefficiencies in inventory management, such as overstocking or slow-moving inventory.
Overall, it is essential for Reliance Steel & Aluminum Co to closely monitor its inventory turnover ratio to ensure optimal inventory management practices and operational efficiency. Further analysis of the underlying reasons for fluctuations in the ratio can provide insights into areas that may require improvement to enhance the company's overall financial performance.