Applied Materials Inc (AMAT)

Activity ratios

Short-term

Turnover ratios

	Oct 27, 2024	Jul 28, 2024	Apr 28, 2024	Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020
Inventory turnover	3.01	2.90	2.81	2.83	2.80	2.77	2.72	2.62	2.61	2.71	2.91	3.12	3.06	3.05	2.82	2.65	2.53	2.30	2.32	2.43
Receivables turnover	5.05	5.33	5.27	5.25	4.71	4.66	4.45	4.45	3.92	4.50	—	5.00	4.13	—	—	5.67	5.50	5.49	5.61	5.37
Payables turnover	10.38	10.98	10.98	11.29	10.85	11.23	10.99	9.84	8.82	8.84	9.35	9.41	8.97	9.29	8.75	9.67	8.80	8.11	8.13	8.09
Working capital turnover	2.12	1.99	2.13	2.17	2.23	2.47	2.67	2.75	2.99	2.90	2.86	2.53	2.34	2.13	1.95	1.86	1.93	2.04	1.94	2.42

Based on the activity ratios of Applied Materials Inc over multiple periods, we can observe the following trends:

1. Inventory turnover has remained relatively stable around 2.8 to 3 times annually. This indicates that the company is effectively managing its inventory levels and efficiently selling its products.

2. Receivables turnover has shown fluctuations but generally remained above 4.5 times annually. This suggests that Applied Materials is efficient in collecting payments from customers, although there are variations in the speed of collecting receivables over time.

3. Payables turnover has been consistent, ranging between 8 and 11 times annually. This implies that the company is managing its payments to suppliers effectively, maintaining a balance between paying off obligations promptly and managing cash flow efficiently.

4. Working capital turnover has shown some variability but generally remained between 2 and 2.5 times annually. This ratio reflects the company's ability to generate sales revenue relative to its working capital investment, indicating a moderate level of efficiency in utilizing its current assets.

Overall, Applied Materials Inc appears to be maintaining healthy activity ratios, demonstrating efficient management of inventory, receivables, payables, and working capital to support its operations and financial performance.

Average number of days

		Oct 27, 2024	Jul 28, 2024	Apr 28, 2024	Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020
Days of inventory on hand (DOH)	days	121.39	125.90	129.85	128.86	130.32	131.75	134.43	139.45	139.95	134.78	125.54	116.88	119.11	119.70	129.31	137.71	144.02	159.00	157.42	150.19
Days of sales outstanding (DSO)	days	72.22	68.53	69.30	69.52	77.48	78.33	81.98	82.00	93.13	81.08	—	73.06	88.47	—	—	64.41	66.31	66.52	65.01	67.96
Number of days of payables	days	35.16	33.24	33.24	32.32	33.65	32.50	33.22	37.11	41.40	41.27	39.05	38.79	40.69	39.31	41.70	37.75	41.47	44.98	44.88	45.12

The activity ratios of Applied Materials Inc, as reflected in the days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables, provide insights into the efficiency of the company's operations and management of its working capital.

1. Days of inventory on hand (DOH):
- The trend shows a fluctuating pattern with slight increases and decreases over the periods analyzed.
- The company held inventory for an average of around 130 days, indicating that it takes approximately four months to sell its inventory.
- The decreasing trend from 2022 to 2023 suggests a potential improvement in inventory management efficiency, with a subsequent increase in the latest period.

2. Days of sales outstanding (DSO):
- The DSO indicates the average number of days it takes for the company to collect its accounts receivable from customers.
- Applied Materials Inc experienced fluctuations in DSO, but generally, the trend shows an improvement in collection efficiency from 2020 to 2021 before an increase and variability in recent periods.
- The company collected receivables in around 70 days on average, signifying a reasonable turnover of accounts receivable.

3. Number of days of payables:
- This metric reflects the average number of days the company takes to pay its suppliers.
- Applied Materials Inc extended its payment period to suppliers over the periods analyzed, with an average of around 37 days.
- The increase in days of payables may indicate a deliberate strategy to manage cash flow and working capital, potentially benefiting the company's liquidity position.

In summary, Applied Materials Inc's activity ratios suggest adequate management of inventory, receivables, and payables, indicating a balanced approach to optimizing operational efficiency and working capital management. The company may continue to monitor these ratios to ensure sustained improvements in its operational performance.

Long-term

	Oct 27, 2024	Jul 28, 2024	Apr 28, 2024	Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020
Fixed asset turnover	8.10	8.63	8.90	9.31	9.65	10.11	10.32	10.44	11.09	11.35	11.86	12.12	11.83	11.88	11.20	11.11	10.72	10.63	10.06	9.66
Total asset turnover	0.79	0.79	0.82	0.83	0.86	0.87	0.91	0.93	0.96	0.95	0.97	0.94	0.89	0.88	0.82	0.78	0.77	0.77	0.71	0.76

The fixed asset turnover ratio for Applied Materials Inc has shown a consistent upward trend over the periods analyzed, indicating that the company is generating more revenue per dollar of fixed assets invested. This suggests efficient utilization of fixed assets to generate sales.

On the other hand, the total asset turnover ratio has fluctuated over the same periods, but generally remained at a stable level. This ratio measures the company's ability to generate sales from its total assets, including both fixed and current assets. A higher total asset turnover ratio indicates better efficiency in utilizing all assets to generate revenue.

Overall, while the fixed asset turnover ratio shows a positive trend, indicating efficient use of fixed assets, the total asset turnover ratio indicates a stable performance in generating sales from all assets. Applied Materials Inc appears to be effectively managing its asset turnover ratios to drive revenue growth.