Apple Inc (AAPL)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 32.45 | 37.76 | 50.27 | 35.71 | 46.66 |
| Receivables turnover | 5.90 | 6.22 | 6.42 | 7.05 | 7.25 |
| Payables turnover | 3.43 | 3.82 | 3.88 | 4.29 | 4.48 |
| Working capital turnover | — | — | — | 38.82 | 7.09 |
The activity ratios for Apple Inc indicate how efficiently the company is managing its assets and liabilities.
1. Inventory Turnover:
- Apple's inventory turnover has shown a declining trend from 46.66 in 2020 to 32.45 in 2024.
- The decrease in inventory turnover may suggest that Apple is holding onto its inventory for a longer period before selling it.
2. Receivables Turnover:
- Apple's receivables turnover has also decreased over the years from 7.25 in 2020 to 5.90 in 2024.
- A lower receivables turnover could indicate that Apple is taking a longer time to collect payments from its customers, potentially impacting its liquidity.
3. Payables Turnover:
- Apple's payables turnover has shown a consistent decline from 4.48 in 2020 to 3.43 in 2024.
- A lower payables turnover indicates that Apple is taking longer to pay its suppliers, which could affect its relationships with vendors.
4. Working Capital Turnover:
- The data does not provide information on Apple's working capital turnover for the years 2020-2022.
- In 2023 and 2024, Apple's working capital turnover was 38.82 and — respectively, suggesting a significant fluctuation in the efficiency of converting working capital into revenue.
Overall, Apple's declining inventory turnover, receivables turnover, and payables turnover ratios may indicate potential inefficiencies in its operations that need to be addressed to improve overall performance and financial health. Furthermore, the fluctuation in working capital turnover highlights the need for Apple to closely monitor and manage its working capital to optimize its resources effectively.
Average number of days
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.25 | 9.67 | 7.26 | 10.22 | 7.82 |
| Days of sales outstanding (DSO) | days | 61.83 | 58.68 | 56.82 | 51.77 | 50.31 |
| Number of days of payables | days | 106.45 | 95.59 | 94.12 | 85.07 | 81.48 |
Activity ratios, such as Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, are key indicators of a company's operational efficiency and management of working capital.
1. Days of Inventory on Hand (DOH):
- Apple's DOH has shown an increasing trend over the last five years, indicating that the company is carrying more inventory relative to its sales. This could be due to factors such as changes in product offerings, supply chain disruptions, or changes in demand patterns.
- The increase in DOH from 7.26 days in 2022 to 11.25 days in 2024 suggests that Apple may be facing challenges in managing its inventory levels efficiently, which could potentially tie up cash and lead to higher carrying costs.
2. Days of Sales Outstanding (DSO):
- Apple's DSO has also been trending upwards, indicating that the company is taking longer to collect payments from its customers. This can impact cash flows and overall liquidity.
- The increase in DSO from 50.31 days in 2020 to 61.83 days in 2024 suggests that Apple's credit and collection policies may need to be reviewed to expedite the collection process and improve cash flow management.
3. Number of Days of Payables:
- Apple's Number of Days of Payables has been increasing over the years, indicating that the company is taking longer to pay its suppliers. This can impact relationships with suppliers and potentially lead to supply chain disruptions.
- The increase in the Number of Days of Payables from 81.48 days in 2020 to 106.45 days in 2024 suggests that Apple may be stretching its payables to better manage its cash flow, but it could also signal potential liquidity issues.
In conclusion, Apple Inc's activity ratios reveal certain challenges in managing its inventory levels, receivables collection, and payables efficiency. It is essential for the company to address these trends to optimize its working capital management, maintain healthy cash flows, and enhance overall operational efficiency.
See also:
Apple Inc Short-term (Operating) Activity Ratios
Long-term
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 8.56 | 8.68 | 9.29 | 9.21 | 7.39 |
| Total asset turnover | 1.07 | 1.08 | 1.11 | 1.03 | 0.84 |
The fixed asset turnover ratio for Apple Inc has shown a decreasing trend over the last five years, from 9.29 in 2022 to 8.56 in 2024. This indicates that Apple is generating slightly less revenue from its fixed assets in 2024 compared to previous years. However, the ratio remains relatively high, suggesting that Apple is efficiently utilizing its fixed assets to generate sales.
In contrast, the total asset turnover ratio has fluctuated over the same period, with a peak of 1.11 in 2022 and a low of 0.84 in 2020. The ratio improved slightly from 2020 to 2024, reaching 1.07. This indicates that Apple is generating more revenue per dollar of total assets in 2024 compared to 2020. Overall, Apple's total asset turnover ratio demonstrates an improvement in the efficiency of its overall asset utilization.
In conclusion, while there has been some fluctuation in Apple Inc's long-term activity ratios over the past five years, both the fixed asset turnover and total asset turnover ratios suggest that the company is effectively leveraging its assets to generate revenue, although there may be slight room for improvement in fixed asset utilization.