F5 Networks Inc (FFIV)

Inventory turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	1,691,810	1,832,870	1,791,260	1,786,160	1,561,500
Inventory	US$ in thousands	76,378	35,874	68,365	22,055	27,898
Inventory turnover		22.15	51.09	26.20	80.99	55.97

September 30, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,691,810K ÷ $76,378K
= 22.15

The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times a company sells and replaces its inventory during a specific period. A higher inventory turnover ratio generally suggests that a company is effectively managing its inventory levels by quickly selling off its products.

From the data provided for F5 Networks Inc, we observe fluctuating inventory turnover ratios over the past five years, as follows:

- In 2020, the inventory turnover ratio was 55.97, indicating that F5 Networks sold and replaced its inventory almost 56 times during that year.
- In 2021, the ratio increased significantly to 80.99, suggesting further efficiency in managing inventory turnover.
- However, in 2022, the ratio decreased to 26.20, representing a significant drop in inventory turnover compared to the previous year.
- It increased again in 2023 to 51.09, indicating a substantial improvement in managing inventory turnover.
- In 2024, the inventory turnover ratio stood at 22.15, showing a decrease compared to the previous year but still at a reasonable level.

The fluctuation in the inventory turnover ratio over the years may indicate changes in the company's sales patterns, inventory management practices, or seasonal variations in demand. Overall, F5 Networks Inc appears to have maintained a relatively high level of inventory turnover, although there were fluctuations in recent years that may warrant further investigation to understand the underlying reasons for such variations.