Analog Devices Inc (ADI)
Activity ratios
Short-term
Turnover ratios
| Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | Nov 2, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.79 | 5.74 | 3.86 | 5.26 | 5.40 |
| Receivables turnover | 8.20 | 6.56 | 4.75 | 7.33 | 9.07 |
| Payables turnover | 15.95 | 13.80 | 10.46 | 14.09 | 14.61 |
| Working capital turnover | 10.19 | 4.73 | 2.66 | 4.69 | 12.09 |
Based on the provided data, we can analyze the activity ratios of Analog Devices Inc. over the past five years.
Inventory turnover indicates how efficiently the company manages its inventory. A higher turnover ratio suggests that the company is selling its inventory at a faster rate. Analog Devices Inc.'s inventory turnover has fluctuated over the past five years, with a peak of 3.24 in 2019 and a low of 2.33 in 2021. This could indicate changes in the company's inventory management practices.
The receivables turnover ratio measures how efficiently the company collects its outstanding receivables. Analog Devices Inc.'s receivables turnover has shown a generally increasing trend over the past five years, reaching 8.37 in 2023, indicating improved efficiency in collecting payments from its customers.
Payables turnover ratio reflects how quickly the company pays its suppliers. Analog Devices Inc. has also shown a generally increasing trend in its payables turnover over the past five years, reaching 8.98 in 2023, which suggests that the company is taking longer to pay its suppliers. This could be indicative of improved cash flow management.
The working capital turnover ratio measures the efficiency of a company's working capital management in generating sales revenue. Analog Devices Inc.'s working capital turnover has exhibited significant fluctuations over the past five years, reaching a peak of 12.57 in 2019 and a low of 2.81 in 2021. The fluctuations in this ratio may indicate changes in the company's working capital management and sales generation strategies.
In conclusion, the activity ratios of Analog Devices Inc. reflect various aspects of its operational efficiency, inventory management, receivables collection, payables management, and working capital utilization over the past five years. These ratios provide valuable insights into the company's performance and management of its resources.
Average number of days
| Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | Nov 2, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 76.23 | 63.58 | 94.52 | 69.34 | 67.63 |
| Days of sales outstanding (DSO) | days | 44.50 | 55.63 | 76.83 | 49.76 | 40.23 |
| Number of days of payables | days | 22.89 | 26.44 | 34.91 | 25.91 | 24.98 |
To analyze Analog Devices Inc.'s activity ratios, we will look at its Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.
DOH measures how many days it takes for the company to sell its inventory. The trend over the past five years shows an increase in the number of days, from 112.58 days in 2019 to 135.36 days in 2023. This may indicate inefficiency in managing inventory.
DSO measures the average number of days it takes for the company to collect on its sales. Analog Devices Inc.'s DSO decreased from 38.70 days in 2019 to 43.59 days in 2023. A lower DSO is generally favorable as it signifies quicker collection of receivables.
The Number of Days of Payables measures how long the company takes to pay its suppliers. Analog Devices Inc.'s payables period decreased from 41.58 days in 2019 to 40.64 days in 2023, indicating a relatively faster payment to suppliers.
Overall, the company's activity ratios suggest a longer holding period for inventory, which might tie up working capital. However, the company has been able to collect receivables relatively faster and maintain a shorter payables period, potentially improving its liquidity position.
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Analog Devices Inc Short-term (Operating) Activity Ratios
Long-term
| Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | Nov 2, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.74 | 4.92 | 3.50 | 4.83 | 4.72 |
| Total asset turnover | 0.25 | 0.23 | 0.13 | 0.25 | 0.27 |
The fixed asset turnover ratio reflects how efficiently a company is using its fixed assets to generate sales. Analog Devices Inc.'s fixed asset turnover has fluctuated over the past five years, ranging from 3.70 to 5.00. This indicates that the company has been able to generate sales relative to its investment in fixed assets, with a higher turnover ratio suggesting better utilization.
On the other hand, the total asset turnover ratio measures the efficiency of a company in using all of its assets to generate revenue. Analog Devices Inc.'s total asset turnover has ranged from 0.14 to 0.28 over the same period. The fluctuation in this ratio suggests varying levels of efficiency in utilizing its total assets to generate sales.
Overall, the company's fixed asset turnover has remained relatively high, indicating strong efficiency in utilizing its fixed assets to generate sales. However, the fluctuation in the total asset turnover ratio suggests varying efficiency in utilizing all of its assets to generate revenue over the past five years.