Adobe Systems Incorporated (ADBE)

Activity ratios

Short-term

Turnover ratios

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
Inventory turnover	—	—	—	—	—
Receivables turnover	8.73	8.51	8.41	9.20	7.30
Payables turnover	7.50	5.71	5.98	5.63	8.00
Working capital turnover	6.85	20.28	9.09	4.89	—

The activity ratios of Adobe Inc provide insights into its efficiency in managing inventory, receivables, payables, and working capital. However, it's important to note that the inventory turnover data is not available for analysis.

The receivables turnover ratio indicates Adobe's ability to collect outstanding credit sales during a specific period. The trend shows a relatively stable performance over the past five years, with the ratio ranging from 7.28 to 9.20. This suggests that Adobe has been effective in converting its receivables into cash, indicating efficient management of its accounts receivable.

The payables turnover ratio measures the speed at which a company pays its suppliers. The trend shows fluctuations in the payables turnover ratio, with values ranging from 5.63 to 7.98 over the past five years. This indicates variability in Adobe's payment practices toward its suppliers, which may warrant further investigation into its relationship with vendors and cash management strategies.

The working capital turnover ratio reflects the company's efficiency in utilizing its working capital to generate sales revenue. The available data shows fluctuating values, with the ratio ranging from 4.89 to 20.28. This suggests variability in Adobe's working capital management efficiency over the past five years, which could be a result of changes in sales levels and working capital investment.

In conclusion, while Adobe Inc has demonstrated consistent efficiency in converting receivables into cash, it has shown variability in payment practices and working capital management. These trends could indicate areas for further analysis to understand the underlying factors influencing the company's performance in managing its activity ratios.

Average number of days

		Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	41.82	42.91	43.43	39.65	49.99
Number of days of payables	days	48.69	63.90	61.06	64.86	45.60

Days of Inventory on Hand (DOH) is not provided in the table, but utilizing the information available, the Days of Sales Outstanding (DSO) indicates the average number of days it takes for Adobe Inc to collect on its sales. The lower the DSO, the quicker the company is converting its sales into cash. Over the past five years, Adobe Inc's DSO has fluctuated, reaching a high of 50.15 days in 2019 and a low of 39.65 days in 2021. The decrease in DSO from 2020 to 2021 signifies an improvement in the company's collection process.

The Number of Days of Payables, on the other hand, represents the average number of days the company takes to pay its suppliers. A higher number suggests that the company takes longer to pay its bills. Adobe Inc's number of days of payables increased from 45.71 days in 2019 to 64.86 days in 2020, before decreasing to 48.69 days in 2023. This decrease indicates that the company has effectively managed its payables over the past two years.

The company's management should continue to monitor these ratios to ensure efficient management of inventory, timely collection of receivables, and effective management of payables for a healthy working capital cycle and liquidity position.

Long-term

	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020	Nov 29, 2019
Fixed asset turnover	9.56	9.23	9.44	8.48	8.64
Total asset turnover	0.65	0.65	0.58	0.53	0.54

The fixed asset turnover for Adobe Inc has been consistently high over the past five years, ranging from 8.48 to 9.56. This indicates that the company has been effectively utilizing its fixed assets to generate sales. The high fixed asset turnover suggests efficient management of property, plant, and equipment.

Similarly, the total asset turnover has remained relatively stable around 0.53 to 0.65 over the past five years. This indicates that Adobe Inc has been successful in generating sales in relation to its total assets. The consistency in this ratio suggests that the company has effectively leveraged its total assets to generate revenue.

Overall, both the fixed asset turnover and total asset turnover ratios indicate that Adobe Inc has been efficient in utilizing its assets to generate sales, demonstrating strong asset management and operational efficiency.