Steel Dynamics Inc (STLD)

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	14,753,110	14,833,330	14,731,970	14,641,300	14,757,510	15,085,630	15,637,870	16,192,640	16,142,950	15,853,030	15,153,410	14,089,490	13,046,430	11,656,600	10,206,960	8,751,210	8,166,750	8,061,840	8,190,830	8,730,310
Inventory	US$ in thousands	3,113,730	3,044,890	3,073,640	3,027,140	2,894,630	2,941,630	3,044,010	2,988,850	3,129,960	3,376,530	3,647,060	3,516,820	3,531,130	2,894,970	2,481,830	2,217,530	1,843,550	1,609,220	1,567,020	1,644,540
Inventory turnover		4.74	4.87	4.79	4.84	5.10	5.13	5.14	5.42	5.16	4.70	4.15	4.01	3.69	4.03	4.11	3.95	4.43	5.01	5.23	5.31

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $14,753,110K ÷ $3,113,730K
= 4.74

Steel Dynamics Inc's inventory turnover has shown some fluctuations over the years, ranging from a low of 3.69 times in December 31, 2021, to a high of 5.42 times in March 31, 2023. Generally, a higher inventory turnover ratio is indicative of more efficient management of inventory, as it suggests that the company is selling and replenishing its inventory at a faster rate.

During the period analyzed, the inventory turnover ratio peaked in March 31, 2023, before gradually declining until December 31, 2024, when it stood at 4.74 times. This indicates that the company took slightly longer to sell and replace its inventory towards the end of the period, potentially signaling a need for better inventory management practices to optimize working capital and minimize holding costs.

Overall, Steel Dynamics Inc's inventory turnover ratios have been relatively healthy, staying above 4 times throughout the period. This suggests that the company has been efficient in managing its inventory levels, but there may be room for improvement to sustain or enhance this efficiency over the long term. Continued monitoring and analysis of the inventory turnover ratio will be essential for the company to ensure optimal inventory management and operational performance.