Simply Good Foods Co (SMPL)

Inventory turnover

		Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019
Cost of revenue	US$ in thousands	789,252	723,117	595,847	492,313	306,075
Inventory	US$ in thousands	116,591	125,479	97,269	59,085	38,085
Inventory turnover		6.77	5.76	6.13	8.33	8.04

August 26, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $789,252K ÷ $116,591K
= 6.77

Inventory turnover measures how efficiently a company manages its inventory by showing how many times the company's inventory is sold and replaced over a certain period. A high inventory turnover ratio indicates efficient inventory management, while a low ratio suggests slow-moving or excess inventory.

Simply Good Foods Co's inventory turnover has exhibited fluctuations over the past five years. In 2023, the inventory turnover ratio increased to 6.77 from 5.76 in 2022, indicating that the company sold and replaced its inventory approximately 6.77 times during the year. This suggests improved efficiency in managing inventory compared to the previous year.

Looking back further, in 2021, the inventory turnover ratio decreased to 6.13 from 8.33 in 2020. This decrease could signal that the company's inventory was turning over at a slower pace compared to the previous year, possibly indicating excess inventory or slower sales.

However, in 2020, the inventory turnover ratio increased to 8.33 from 8.03 in 2019, reflecting a more efficient turnover of inventory during that year.

Overall, the fluctuations in Simply Good Foods Co's inventory turnover ratio suggest varying levels of inventory management efficiency over the past five years. Further analysis of operational and market factors may be needed to understand the reasons behind these fluctuations and to assess the company's inventory management performance.