Simply Good Foods Co (SMPL)

Inventory turnover

		Aug 31, 2024	Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020
Cost of revenue	US$ in thousands	819,755	789,252	723,117	595,847	492,313
Inventory	US$ in thousands	142,107	116,591	125,479	97,269	59,085
Inventory turnover		5.77	6.77	5.76	6.13	8.33

August 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $819,755K ÷ $142,107K
= 5.77

Simply Good Foods Co's inventory turnover has fluctuated over the past five years, with values ranging from 5.76 to 8.33. Inventory turnover measures how effectively the company manages its inventory by showing how many times its inventory is sold and replaced within a given period. A higher turnover ratio indicates that inventory is being sold more frequently, which can imply efficient management and reduced risk of inventory obsolescence or excess holdings.

In this case, the trend shows a decrease from 8.33 in 2020 to 5.77 in 2024, with a slight variation in between. This could suggest a slower rate of inventory turnover in recent years, which may be due to factors such as changing consumer demand, production inefficiencies, or supply chain disruptions.

It would be beneficial for Simply Good Foods Co to conduct a detailed analysis of their inventory management practices and supply chain operations to identify any potential inefficiencies and take corrective actions to improve inventory turnover and overall operational efficiency.