Jabil Circuit Inc (JBL)

Short-term

Turnover ratios

Activity ratios provide insight into how efficiently a company is managing its assets and liabilities. Let's analyze Jabil Inc's activity ratios based on the provided data from August 31, 2023, back to August 31, 2019.

Inventory turnover:
Jabil Inc's inventory turnover has shown a slightly increasing trend over the last five years, indicating an improvement in the efficiency of managing its inventory. The ratio of 6.12 in 2023 suggests that the company generated $6.12 in sales for every $1 of inventory, which is a positive sign of efficient inventory management.

Receivables turnover:
The receivables turnover ratio has also been relatively steady, with a slight increase from 9.21 in 2019 to 9.52 in 2023. This indicates that the company is collecting its receivables more efficiently, translating to an average of 9.52 times per year in 2023.

Payables turnover:
Jabil Inc's payables turnover has shown an increasing trend over the five-year period, reaching 5.61 in 2023. This signifies that the company is paying its suppliers more efficiently, rotating its accounts payable 5.61 times in 2023, compared to 4.52 times in 2019.

Working capital turnover:
The working capital turnover ratio has fluctuated significantly over the years, from an exceptionally high figure in 2022 to 17.05 in 2023. This may indicate changes in the company's operating and financial strategies. However, it is important to note that the negative value for 2019 requires further investigation as it might be an anomaly or a result of specific financial events during that year.

Overall, Jabil Inc's activity ratios reflect a generally positive trend in effectively managing its inventory, receivables, and payables as evidenced by stable or improving turnover ratios. However, the significant fluctuation in the working capital turnover ratio warrants a closer examination of the company's financial and operational activities during the relevant periods.

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Average number of days

To analyze Jabil Inc's activity ratios, we will focus on Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables for the years ranging from August 31, 2019, to August 31, 2023.

Days of Inventory on Hand (DOH) measures the average number of days Jabil holds its inventory before it is sold. From 2019 to 2023, there has been a fluctuation in this ratio, with a peak at 72.51 days in 2022 and a decrease to 59.69 days in 2023. This indicates that Jabil has managed to reduce the number of days its inventory is held, which is a positive sign for efficiency.

Days of Sales Outstanding (DSO) measures the average number of days it takes for Jabil to collect on its sales. The trend shows a decrease from 43.56 days in 2022 to 38.36 days in 2023, indicating an improvement in the collection of receivables.

Number of Days of Payables measures the average number of days it takes for Jabil to pay its suppliers. There has been a decrease in this ratio from 94.73 days in 2022 to 65.11 days in 2023, implying that Jabil is paying its suppliers more efficiently.

Overall, Jabil Inc has made improvements in its activity ratios from 2022 to 2023, as it managed to reduce the number of days it holds inventory, collect sales more quickly, and pay its suppliers more efficiently. These improvements suggest that Jabil has been focusing on optimizing its working capital management and supply chain efficiency.

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Long-term

Based on the long-term activity ratios of Jabil Inc, the fixed asset turnover has steadily increased from 7.58 in 2019 to 11.06 in 2023. This indicates that the company is generating more revenue from its fixed assets over the years.

Similarly, the total asset turnover has shown a slight fluctuation, with a decrease from 1.95 in 2019 to 1.70 in 2022, followed by an increase to 1.79 in 2023. Overall, the company is generating revenue at a relatively consistent level in relation to its total assets.

These ratios suggest that Jabil Inc has been effectively utilizing its fixed assets to generate revenue, and although there has been some variation in the total asset turnover, the company has maintained a reasonable level of efficiency in generating sales in relation to its total assets over the years.