Jabil Circuit Inc (JBL)

Fixed asset turnover

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Revenue	US$ in thousands	34,496,000	33,323,000	29,141,000	27,063,200	25,282,300
Property, plant and equipment	US$ in thousands	7,339,000	9,210,000	8,790,000	3,665,310	3,333,750
Fixed asset turnover		4.70	3.62	3.32	7.38	7.58

August 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $34,496,000K ÷ $7,339,000K
= 4.70

The fixed asset turnover ratio measures how efficiently a company is using its fixed assets to generate revenue. It is calculated by dividing the net sales by the average fixed assets. A higher ratio indicates better utilization of fixed assets.

Looking at the trend in Jabil Inc's fixed asset turnover ratio over the past five years, we observe a consistent improvement in the company's ability to generate sales from its fixed assets. The ratio has increased from 7.58 in 2019 to 11.06 in 2023, indicating that Jabil Inc has been able to generate more sales for each dollar invested in fixed assets. This improvement suggests that the company has been effectively utilizing its fixed assets to drive revenue generation.

The rise in the fixed asset turnover ratio implies that Jabil Inc has successfully optimized its fixed asset utilization, potentially through efficient production processes, effective asset management, or improved sales generation. This trend reflects positively on the company's operational efficiency and may indicate enhanced productivity and profitability.

Overall, the increasing trend in Jabil Inc's fixed asset turnover ratio signals a positive development in the company's ability to generate sales from its fixed asset base, indicating improving operational efficiency and potentially contributing to its overall financial performance.