Jabil Circuit Inc (JBL)

Inventory turnover

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Cost of revenue	US$ in thousands	33,220,000	32,123,000	28,224,000	26,728,100	23,369,300
Inventory	US$ in thousands	5,206,000	6,128,000	4,414,000	3,132,000	3,023,000
Inventory turnover		6.38	5.24	6.39	8.53	7.73

August 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $33,220,000K ÷ $5,206,000K
= 6.38

The inventory turnover ratio measures the number of times a company's inventory is sold and replaced over a specific period, indicating how efficiently the company manages its inventory. It is calculated by dividing the cost of goods sold by the average inventory for the period. A higher turnover ratio generally indicates better inventory management and sales performance.

Looking at Jabil Inc's inventory turnover over the past five years, we observe the following trends:
- In 2023, the inventory turnover ratio has increased to 6.12 from 5.03 in 2022, indicating that the company's inventory was sold and replaced approximately 6.12 times during the year.
- Comparing the ratio to 2021, we see a small increase from 6.10 to 6.12, suggesting relatively steady inventory management.
- However, the turnover ratio has declined from 8.09 in 2020 to 6.10 in 2021, indicating a slower rate of inventory turnover during that period.
- Similarly, there was a decrease in the turnover ratio from 7.73 in 2019 to 8.09 in 2020, indicating a more efficient management of inventory in 2019.

Overall, the recent increase in the inventory turnover ratio suggests that Jabil Inc has improved its inventory management and sales performance, which is a positive indication of efficiency in utilizing its inventory to generate sales. However, it is important to consider the industry and company-specific factors when interpreting this ratio, as different industries may have different optimal turnover levels.