ADEIA CORP (ADEA)

Short-term

Turnover ratios

ADEIA CORP's activity ratios provide insights into how efficiently the company manages its operations.

1. Inventory turnover: ADEIA CORP's inventory turnover fluctuated over the period, ranging from negative values to around 120 times per year. The high turnover in some quarters indicates that the company effectively sells through its inventory, while negative values may suggest inventory management challenges.

2. Receivables turnover: The receivables turnover remained relatively stable, indicating that ADEIA CORP collects its receivables efficiently. The ratios suggest that the company typically collects receivables between 2 to 4 times a year.

3. Payables turnover: ADEIA CORP's payables turnover varied significantly, from negative values to extremely high values over the period. Negative values may indicate delays in paying suppliers, while extremely high values could suggest aggressive payment practices.

4. Working capital turnover: The working capital turnover ratios show how effectively ADEIA CORP utilizes its working capital to generate revenue. The ratios ranged from around 1.3 to 4.8 times a year, indicating variations in the efficiency of working capital utilization.

Overall, ADEIA CORP should monitor these activity ratios closely to ensure efficient management of inventory, receivables, payables, and working capital, which are crucial for optimizing cash flow and profitability.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and operations. Let's analyze ADEIA CORP's activity ratios based on the provided data:

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows fluctuations over the quarters.
- ADEIA CORP carried inventory for an average of 6.02 days in 2023, down from 4.05 days in 2022.
- The increase in DOH in Q4 2023 compared to Q2 and Q3 may indicate a build-up of inventory, which could tie up working capital.

2. Days of Sales Outstanding (DSO):
- ADEIA CORP took approximately 120.63 days on average to collect its accounts receivable in 2023.
- DSO decreased significantly from Q2 to Q4 2023, indicating improved collection efficiency.
- However, the spike in DSO in Q2 2022 suggests potential issues with credit policies or customer payment delays.

3. Number of Days of Payables:
- ADEIA CORP took an average of 8.80 days to pay its suppliers in 2023, showing a slight increase from 7.19 days in 2022.
- The decline in days of payables in Q4 2023 compared to Q2 and Q3 may suggest accelerated payments to suppliers, impacting cash flow.
- The low days of payables in Q1 2022 could indicate efficient management of trade credit terms but may also hint at strained supplier relationships.

In conclusion, ADEIA CORP's activity ratios reflect varying levels of efficiency in inventory management, receivables collection, and payables turnover. Monitoring these ratios can help identify operational strengths and areas for improvement in working capital management and overall business performance.

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Long-term

Based on the data provided, we can observe substantial fluctuations in ADEIA CORP's long-term activity ratios over the past few quarters.

1. Fixed Asset Turnover: This ratio measures how efficiently the company is utilizing its fixed assets to generate sales. A higher ratio is generally preferred as it indicates that the company is effectively using its fixed assets to generate revenue. ADEIA CORP's fixed asset turnover has been quite volatile, ranging from a low of 7.65 to a high of 154.28. The huge variations in this ratio suggest potential issues with asset management or irregularities in sales performance.

2. Total Asset Turnover: This ratio reflects the company's overall efficiency in generating revenue from all its assets. A higher total asset turnover indicates that the company is making better use of its assets to generate sales. ADEIA CORP's total asset turnover has also fluctuated significantly, ranging from 0.20 to 0.36. While the ratio has improved over the periods, the fluctuations suggest inconsistent performance in asset utilization and revenue generation.

In conclusion, ADEIA CORP's long-term activity ratios show significant volatility, indicating possible challenges in effectively managing and utilizing its assets to generate revenue consistently. Further analysis of the company's operational efficiency and investment in fixed assets may provide insights into the reasons behind these fluctuations and help in developing strategies for improving long-term financial performance.