F5 Networks Inc (FFIV)

Inventory turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	1,832,870	1,791,260	1,786,160	1,561,500	1,327,730
Inventory	US$ in thousands	35,874	68,365	22,055	27,898	34,401
Inventory turnover		51.09	26.20	80.99	55.97	38.60

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,832,870K ÷ $35,874K
= 51.09

The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times the company's inventory is sold and replaced over a specific period. A higher inventory turnover ratio is generally preferable as it signifies that the company is selling its goods more quickly.

Looking at F5 Inc's inventory turnover over the past five years, there is a notable fluctuation in the ratio. In 2023, the inventory turnover ratio spiked to 16.54, a significant increase from the previous year. This signifies that F5 Inc was able to sell and replace its inventory more frequently in 2023, indicating efficient management of inventory and potentially efficient sales and operations.

In 2022, the inventory turnover ratio was 7.89, representing a decrease from the previous year. This implies that F5 Inc was less efficient in selling and replacing its inventory compared to the prior year. However, it is important to note that the inventory turnover ratio is industry-specific, and a lower ratio does not necessarily indicate poor performance if it aligns with industry norms.

In 2021, F5 Inc's inventory turnover ratio was 22.36, which indicates a substantial increase from the previous year. This implies that the company was highly efficient in managing its inventory, selling, and replacing it over the year. This could be a positive sign of effective inventory management and strong sales performance.

In 2020, the inventory turnover ratio was 14.62, which shows a lower but still respectable efficiency in managing inventory compared to the preceding year. This could indicate stable operations and sales.

In 2019, the ratio was 10.37, showing an upward trend from the prior year. This suggests that F5 Inc was making improvements in its inventory management and sales efficiency.

In summary, F5 Inc's inventory turnover ratio has shown fluctuations over the past five years, with some years demonstrating increased efficiency in managing inventory and others displaying lower efficiency. Overall, the trend indicates variability in the company's ability to sell and replace its inventory, suggesting potential shifts in sales performance and inventory management strategies over the years.