Juniper Networks Inc (JNPR)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	2,092,100	2,362,600	2,342,900	1,995,300	1,871,400
Inventory	US$ in thousands	830,100	952,400	619,400	272,600	210,200
Inventory turnover		2.52	2.48	3.78	7.32	8.90

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $2,092,100K ÷ $830,100K
= 2.52

Inventory turnover is a crucial financial ratio that measures how efficiently a company manages its inventory by assessing how many times it sells and replaces its inventory within a specific period. In the case of Juniper Networks Inc, the trend of its inventory turnover over the past five years reflects a notable decline.

As of December 31, 2020, Juniper Networks Inc had an inventory turnover of 8.90, indicating that the company sold and replaced its inventory approximately 8.90 times during that year. This high inventory turnover suggests efficient inventory management practices.

However, this efficiency seems to have declined over the subsequent years. By December 31, 2021, the inventory turnover decreased to 7.32, and further dropped to 3.78 by December 31, 2022. This downward trend suggests that Juniper Networks Inc might be facing challenges in efficiently managing its inventory levels or experiencing difficulties in selling products at the same pace as before.

The declining trend continued in the following years, with inventory turnover dropping to 2.48 by December 31, 2023, and slightly increasing to 2.52 by December 31, 2024. These lower inventory turnover ratios imply that the company's inventory management may require attention to improve operational efficiency and potentially avoid issues such as excess inventory holding costs or stockouts.

In conclusion, the decreasing trend in Juniper Networks Inc's inventory turnover over the past five years indicates a potential need for the company to reassess its inventory management strategies and make necessary adjustments to enhance operational efficiency and profitability.