ADEIA CORP (ADEA)

Short-term

Turnover ratios

ADEIA CORP's activity ratios provide insight into how efficiently the company is managing its resources.

Inventory turnover has fluctuated over the years, with a significant increase from 2020 to 2021 and a decrease in 2023 compared to 2021. The high inventory turnover in 2021 suggests the company was able to quickly sell its inventory, whereas the lower turnover in 2023 may indicate slower sales or excess inventory.

Receivables turnover has been relatively stable over the years, indicating that the company is collecting its receivables at a consistent rate. A higher turnover ratio is generally seen as positive, as it reflects efficient collection practices.

Payables turnover has varied significantly from 2020 to 2023. The extremely high turnover in 2021 suggests that the company was paying its suppliers at a very rapid rate, possibly taking advantage of early payment discounts. The lower turnover in 2023 compared to 2021 could indicate a change in payment terms or supplier relationships.

Working capital turnover measures how effectively the company is utilizing its working capital to generate sales. A higher turnover ratio indicates more efficient use of working capital. ADEIA CORP's working capital turnover has fluctuated over the years, with the ratio decreasing in 2023 compared to 2022, indicating a potential decline in sales relative to the amount of working capital employed.

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Average number of days

The activity ratios of ADEIA CORP provide insights into the efficiency of the company's operations in managing inventory, collecting receivables, and paying suppliers over the past four years.

1. Days of Inventory on Hand (DOH):
- In 2020, the company had 7.40 days of inventory on hand, indicating that, on average, it took approximately 7.40 days to sell its inventory.
- In 2021, the DOH decreased significantly to 2.95 days, suggesting more efficient inventory management.
- However, there is missing data for 2022, so a direct comparison is not possible, but the company had 13.00 days of inventory on hand in 2023, which is higher than in 2021.
- The increase in DOH in 2023 compared to 2021 might indicate potential issues with inventory management or changing business conditions.

2. Days of Sales Outstanding (DSO):
- The DSO measures how long it takes the company to collect payments from its customers.
- The DSO was highest in 2021 at 206.53 days, indicating a relatively long collection period for receivables.
- In 2020 and 2022, the DSO was 175.74 days and 109.96 days, respectively, showing improvements in collecting receivables.
- However, in 2023, the DSO increased to 107.56 days, possibly signaling slower collections or changes in the company's credit policies.

3. Number of Days of Payables:
- The days of payables metric reflects the number of days the company takes to pay its suppliers.
- In 2021, the company took an average of 0.26 days to pay its suppliers, indicating quick payment terms.
- The days of payables increased to 5.24 days in 2022 and further to 17.71 days in 2023.
- The significant increase in payables days in 2023 compared to previous years could suggest a shift in the company's relationship with suppliers or cash flow challenges.

In conclusion, the activity ratios of ADEIA CORP show fluctuations over the years in managing inventory, collecting receivables, and paying suppliers. Monitoring these ratios can help stakeholders assess the company's operational efficiency and financial health.

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Long-term

ADEIA CORP's fixed asset turnover has experienced fluctuations over the past four years, with a significant increase from 2020 to 2021, followed by a decline in 2022 and a notable increase again in 2023. The company's fixed asset turnover indicates that it generated $55.77 of sales revenue for every dollar invested in fixed assets in 2023.

In contrast, the total asset turnover of ADEIA CORP has remained relatively stable around the 0.35 to 0.36 range in 2023 and 2022. However, the total asset turnover ratio has shown an improvement compared to 2020 and 2021, indicating that the company is utilizing its total assets more efficiently to generate sales revenue.

Overall, ADEIA CORP's long-term activity ratios suggest that the company has been able to effectively utilize its fixed assets to generate sales revenue, while also demonstrating improved efficiency in utilizing its total assets over the years. Further analysis of the company's operational efficiency and asset management practices could provide additional insights into its long-term performance.