Jabil Circuit Inc (JBL)

Debt-to-equity ratio

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Long-term debt	US$ in thousands	2,875,000	2,575,000	2,878,000	2,678,000	2,121,280
Total stockholders’ equity	US$ in thousands	2,866,000	2,451,000	2,136,000	1,811,000	1,887,440
Debt-to-equity ratio		1.00	1.05	1.35	1.48	1.12

August 31, 2023 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $2,875,000K ÷ $2,866,000K
= 1.00

The debt-to-equity ratio measures the proportion of a company's financing that comes from debt versus equity. A higher ratio indicates a greater reliance on debt to finance operations, while a lower ratio suggests more reliance on equity.

Looking at Jabil Inc's debt-to-equity ratios over the past five years, we see a declining trend from 1.32 in 2019 to 1.00 in 2023. This suggests that the company has been gradually reducing its reliance on debt financing in favor of equity.

In 2019, the debt-to-equity ratio was relatively high at 1.32, indicating that Jabil had a significant amount of debt compared to equity. However, over the following years, the ratio decreased, reaching 1.00 in 2023. This reduction in the ratio signals a shift towards a more balanced capital structure, with a lower proportion of debt relative to equity.

A declining debt-to-equity ratio can be seen as a positive indicator of financial stability and lower financial risk, as it implies that the company is relying less on debt to fund its operations. It may also indicate that the company's equity position has strengthened, potentially providing a more solid foundation for future growth.

Overall, the decreasing trend in Jabil Inc's debt-to-equity ratio from 2019 to 2023 suggests an improvement in its capital structure and potentially enhanced financial health. However, further analysis of the company's financial statements and industry trends is recommended to gain a more comprehensive understanding of its financial position and performance.