ADEIA CORP (ADEA)

Short-term

Turnover ratios

The analysis of ADEIA CORP's activity ratios reveals significant fluctuations in the company's efficiency in managing its assets and liabilities over the years.

1. Inventory Turnover:
- ADEIA CORP's inventory turnover has shown a substantial improvement from 49.35 in 2020 to 123.84 in 2021. This increase indicates that the company's inventory is selling at a faster rate, which is generally positive for cash flow and profitability.

2. Receivables Turnover:
- The receivables turnover ratio decreased from 2.08 in 2020 to 1.77 in 2021, but then saw an increase in subsequent years, reaching 3.39 in 2023. This suggests that the company has been collecting its receivables more efficiently over time.

3. Payables Turnover:
- A significant anomaly is observed in the payables turnover ratio, with a drastic jump from 37.15 in 2020 to 1,410.02 in 2021. Such a high ratio in 2021 could indicate a potential error in reporting or abnormal business activities. Subsequently, the ratio decreased to more reasonable levels in the following years.

4. Working Capital Turnover:
- The working capital turnover ratio fluctuated, indicating changes in the company's efficiency in generating revenue relative to its working capital. ADEIA CORP experienced a peak in 2022 with a ratio of 4.77, showing a notable improvement in utilizing its working capital efficiently.

In conclusion, while ADEIA CORP has shown improvements in managing its inventory and receivables turnover ratios over the years, the payables turnover ratio in 2021 raises concerns and warrants further investigation into the company's financial reporting practices. The fluctuating trend in the working capital turnover ratio indicates changes in the company's operational efficiency and its ability to convert working capital into revenue.

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Average number of days

ADEIA CORP's activity ratios indicate the efficiency of its operations in managing inventory, collecting receivables, and paying suppliers.

1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has improved significantly over the years, with DOH decreasing from 7.40 days in 2020 to 2.95 days in 2021. However, data is not available for the following years.
- A lower DOH suggests that ADEIA CORP is selling its inventory faster, which could indicate efficient inventory management and potentially lower storage costs.

2. Days of Sales Outstanding (DSO):
- DSO measures how quickly the company collects its accounts receivable. The trend for ADEIA CORP shows some fluctuation, with DSO increasing from 175.74 days in 2020 to 206.53 days in 2021, but decreasing in the following years.
- A decreasing trend in DSO indicates that the company is improving its collections process, which can lead to better cash flow management and reduced risk of bad debts.

3. Number of Days of Payables:
- The number of days of payables shows how long it takes for ADEIA CORP to pay its suppliers. The data indicates that the company is paying its suppliers more quickly, with the number of days of payables decreasing from 9.83 days in 2020 to 0.26 days in 2021.
- A lower number of days of payables may indicate strong supplier relationships or possible negotiation advantages, but it could also signify potential cash flow challenges if not managed appropriately.

Overall, ADEIA CORP's activity ratios reveal improvements in inventory turnover and payables management, although there is some fluctuation in receivables collection efficiency. Monitoring these ratios can help assess the company's operational performance and identify areas for further improvement.

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Long-term

ADEIA CORP's fixed asset turnover has shown a significant increase over the past years, from 8.16 in 2020 to 96.47 in 2022, before experiencing a slight decline to 55.77 in 2023 and then rising again to 59.90 in 2024. This indicates that the company is generating more revenue relative to its fixed assets, showcasing an improvement in its efficiency in utilizing these assets to generate sales.

In terms of total asset turnover, ADEIA CORP's performance has been somewhat fluctuating but overall stable. It decreased from 0.19 in 2020 to 0.16 in 2021, then increased to 0.36 in 2022, before slightly dropping to 0.35 in 2023 and further to 0.34 in 2024. This suggests that the company is generating revenue relative to its total assets, though not as efficiently as with its fixed assets.

Overall, ADEIA CORP's long-term activity ratios indicate a positive trend in its ability to generate revenue in relation to its assets, with fixed asset turnover showing a more pronounced improvement compared to total asset turnover over the years analyzed.