Jabil Circuit Inc (JBL)

Working capital 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
Total current assets	US$ in thousands	14,730,000	13,908,000	10,877,000	9,135,000	8,345,080
Total current liabilities	US$ in thousands	12,695,000	13,697,000	10,683,000	9,059,000	8,532,100
Working capital turnover		16.95	157.93	150.21	356.09	—

August 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $34,496,000K ÷ ($14,730,000K – $12,695,000K)
= 16.95

The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher turnover ratio indicates effective management of working capital and better utilization of resources.

Looking at Jabil Inc's working capital turnover over the past five years, we can observe significant fluctuations.

In 2023, the working capital turnover stood at 17.05, representing a significant decline from the previous year's ratio of 158.66. This decrease implies a less efficient use of working capital to generate sales compared to the prior year. It could be due to an increase in working capital without a proportionate rise in sales.

In 2022, the ratio was 158.66, a substantial increase from 2021's 150.95. This indicates an improvement in the efficiency of working capital utilization in generating sales. The company managed to generate a higher volume of sales relative to its working capital, which is a positive sign of efficient operations.

In 2021, the working capital turnover ratio was 150.95, slightly lower than the 2020 ratio of 361.62. This decline may suggest that the company's working capital was utilized less effectively to generate sales revenue compared to the previous year.

Further, in 2020, the ratio was 361.62, demonstrating an exceptionally high efficiency in utilizing working capital to generate sales. This indicates that Jabil Inc efficiently turned its working capital into sales revenue during that period.

It's important to note that there is no data available for 2019. However, based on the trend observed over the years, it is clear that the working capital turnover ratio has been volatile, indicating fluctuations in the company's working capital management and sales generation efficiency.

In conclusion, Jabil Inc's working capital turnover ratio has shown varying levels of efficiency in utilizing working capital to generate sales over the past five years. It is essential for the company to consistently monitor and manage its working capital to ensure optimal utilization and improved operational efficiency.