Adobe Systems Incorporated (ADBE)

Activity ratios

Short-term

Turnover ratios

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020
Inventory turnover	—	—	—	—	—
Receivables turnover	10.38	8.73	8.51	8.41	9.20
Payables turnover	6.53	7.50	5.71	5.98	5.63
Working capital turnover	30.25	6.85	20.28	9.09	4.89

Analyzing the activity ratios of Adobe Systems Incorporated, we observe the following trends:

1. Inventory Turnover: The inventory turnover ratio indicates how efficiently a company manages its inventory. Adobe's inventory turnover data shows that the ratio was not disclosed in the provided years, implying that specific data on inventory turnover is not available for analysis.

2. Receivables Turnover: The receivables turnover ratio signifies how quickly a company collects cash from its credit sales. Over the years, Adobe's receivables turnover has shown a relatively stable trend, ranging from 8.41 to 10.38. A higher turnover indicates a faster collection of receivables, which can improve cash flow and liquidity.

3. Payables Turnover: The payables turnover ratio reflects how efficiently a company pays off its trade payables. Adobe's payables turnover has fluctuated from 5.63 to 7.50, indicating changes in the company's payment practices. A higher turnover suggests that Adobe has been able to meet its payables more quickly in certain years.

4. Working Capital Turnover: The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Adobe's working capital turnover has shown significant variability, ranging from 4.89 to 30.25. A higher turnover ratio indicates that Adobe has efficiently utilized its working capital to drive sales in those particular years.

Overall, analyzing these activity ratios provides insights into Adobe's efficiency in managing its inventory, receivables, payables, and working capital to support its operations and financial performance.

Average number of days

		Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	35.17	41.82	42.91	43.43	39.65
Number of days of payables	days	55.88	48.69	63.90	61.06	64.86

Let's analyze the activity ratios of Adobe Systems Incorporated based on the provided data:

1. Days of Inventory on Hand (DOH): Unfortunately, specific data for DOH is not available in the provided dataset for the years from 2020 to 2024. DOH is a measure of how efficiently a company manages its inventory. A lower DOH indicates that the company is selling inventory quickly, which may be positive for liquidity and cash flow.

2. Days of Sales Outstanding (DSO): The DSO measures the average number of days it takes a company to collect revenue after a sale is made. Adobe's DSO has decreased from 39.65 days in 2020 to 35.17 days in 2024. A decreasing trend in DSO is generally favorable as it indicates that customers are paying more promptly, improving cash flow and liquidity for the company.

3. Number of Days of Payables: The number of days of payables measures how long it takes a company to pay its suppliers. Adobe's payables days have fluctuated over the years, from 64.86 days in 2020 to 55.88 days in 2024. A lower number of days of payables suggests that the company is paying its suppliers more quickly. However, it is essential to strike a balance to maintain good relationships with suppliers.

In summary, while Adobe's DSO has decreased over the years, indicating improved efficiency in collecting revenue, the trend in payables days has been somewhat inconsistent. Without data for DOH, a comprehensive assessment of Adobe's inventory management efficiency is not possible. Further analysis and comparison with industry benchmarks would provide a more detailed understanding of Adobe's activity ratios and operational effectiveness.

Long-term

	Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020
Fixed asset turnover	11.11	9.56	9.23	9.44	8.48
Total asset turnover	0.71	0.65	0.65	0.58	0.53

Long-term activity ratios reflect how efficiently a company is utilizing its assets to generate sales. Two key ratios used to assess long-term activity are fixed asset turnover and total asset turnover.

Fixed asset turnover for Adobe Systems Incorporated has shown a positive trend over the years, increasing from 8.48 in November 27, 2020, to 11.11 in November 29, 2024. This indicates that Adobe is generating more revenue from its fixed assets, such as property, plant, and equipment, which is a positive sign of operational efficiency.

Total asset turnover has also demonstrated an upward trajectory, rising from 0.53 in November 27, 2020, to 0.71 in November 29, 2024. This indicates that Adobe is effectively utilizing both fixed and current assets to generate sales and indicates improved efficiency in asset utilization over the years.

Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios suggest that Adobe Systems Incorporated has been successful in maximizing its asset utilization to drive revenue growth and operational efficiency over the analyzed period.