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# CarMax Inventory Turnover

: 1.21 (As of May. 2020)
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Inventory Turnover measures how fast the company turns over its inventory within a year. It is calculated as Cost of Goods Sold divided by Total Inventories. CarMax's Cost of Goods Sold for the three months ended in May. 2020 was USD2,875 Mil. CarMax's Total Inventories for the quarter that ended in May. 2020 was USD2,373 Mil. CarMax's Inventory Turnover for the quarter that ended in May. 2020 was 1.21.

Days Inventory indicates the number of days of goods in sales that a company has in the inventory. CarMax's Days Inventory for the three months ended in May. 2020 was 75.33.

Total Inventories can be measured by Days Sales of Inventory (DSI). CarMax's days sales of inventory (DSI) for the three months ended in May. 2020 was 67.06.

Inventory-to-Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. CarMax's Inventory-to-Revenue for the quarter that ended in May. 2020 was 0.73.

## CarMax Inventory Turnover Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

 CarMax Annual Data Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17 Feb18 Feb19 Feb20 Inventory Turnover     6.53 6.53 6.36 6.39 6.56

## CarMax Inventory Turnover Calculation

CarMax's Inventory Turnover for the fiscal year that ended in Feb. 2020 is calculated as

 Inventory Turnover (A: Feb. 2020 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (A: Feb. 2020 ) / ( (Total Inventories (A: Feb. 2019 ) + Total Inventories (A: Feb. 2020 )) / count ) = 17597.647 / ( (2519.455 + 2846.416) / 2 ) = 17597.647 / 2682.9355 = 6.56

CarMax's Inventory Turnover for the quarter that ended in May. 2020 is calculated as

 Inventory Turnover (Q: May. 2020 ) = Cost of Goods Sold / Total Inventories = Cost of Goods Sold (Q: May. 2020 ) / ( (Total Inventories (Q: Feb. 2020 ) + Total Inventories (Q: May. 2020 )) / count ) = 2874.599 / ( (2846.416 + 1899.43) / 2 ) = 2874.599 / 2372.923 = 1.21

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

CarMax  (NYSE:KMX) Inventory Turnover Explanation

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher Inventory Turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

1. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

CarMax's Days Inventory for the three months ended in May. 2020 is calculated as:

 Days Inventory = Total Inventories (Q: May. 2020 ) / Cost of Goods Sold (Q: May. 2020 ) * Days in Period = 2372.923 / 2874.599 * 365 / 4 = 75.33

2. Total Inventories can be measured by Days Sales of Inventory (DSI).

CarMax's Days Sales of Inventory for the three months ended in May. 2020 is calculated as:

 Days Sales of Inventory (DSI) = Total Inventories (Q: May. 2020 ) / Revenue (Q: May. 2020 ) * Days in Period = 2372.923 / 3228.782 * 365 / 4 = 67.06

3. Inventory-to-Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

CarMax's Inventory to Revenue for the quarter that ended in May. 2020 is calculated as

 Inventory-to-Revenue = Total Inventories (Q: May. 2020 ) / Revenue (Q: May. 2020 ) = 2372.923 / 3228.782 = 0.73

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Be Aware

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate Inventory Turnover. An average inventory is a better indication.