Alpha and Omega Semiconductor Ltd (AOSL)
Activity ratios
Short-term
Turnover ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.48 | 2.68 | 3.22 | 2.93 | 2.67 |
| Receivables turnover | 42.01 | 29.18 | 11.70 | 17.26 | 34.85 |
| Payables turnover | — | — | 5.83 | 5.61 | 4.20 |
| Working capital turnover | 2.70 | 2.75 | 2.76 | 3.77 | 3.68 |
Alpha and Omega Semiconductor Ltd's activity ratios provide insights into the efficiency of the company in managing its assets and liabilities.
1. Inventory turnover: Alpha and Omega Semiconductor's inventory turnover has been fluctuating over the past five years, ranging between 2.48 and 3.22. This ratio indicates how many times the company sells and replaces its inventory during the period. A higher turnover ratio is generally preferred as it signifies that the company is efficiently managing its inventory levels.
2. Receivables turnover: The receivables turnover ratio has shown significant variability over the years, with a peak of 42.01 in 2024. This ratio reflects how many times the company collects its receivables during the year. A higher ratio indicates better efficiency in collecting outstanding receivables.
3. Payables turnover: The payables turnover ratio is not available for the latest years in the data provided. This ratio measures how efficiently a company pays its suppliers. A higher payables turnover ratio suggests that the company is managing its payables effectively.
4. Working capital turnover: The working capital turnover ratio has also been relatively stable over the years, ranging from 2.70 to 3.77. This ratio indicates how efficiently the company generates revenue relative to its working capital. A higher ratio suggests that the company is effectively utilizing its working capital to generate sales.
In conclusion, Alpha and Omega Semiconductor Ltd's activity ratios reflect fluctuations in the efficiency of managing its inventory, receivables, and working capital. Monitoring these ratios over time can help assess the company's operational performance and identify areas for improvement.
Average number of days
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 147.21 | 136.00 | 113.33 | 124.50 | 136.58 |
| Days of sales outstanding (DSO) | days | 8.69 | 12.51 | 31.19 | 21.15 | 10.47 |
| Number of days of payables | days | — | — | 62.66 | 65.11 | 86.85 |
Days of Inventory on Hand (DOH): Alpha and Omega Semiconductor Ltd's Days of Inventory on Hand has been increasing over the years, indicating that the company is taking longer to turn its inventory into sales. This could suggest potential issues with inventory management efficiency or overstocking.
Days of Sales Outstanding (DSO): The Days of Sales Outstanding for Alpha and Omega Semiconductor Ltd have fluctuated over the years, with a significant decrease from 2022 to 2023, followed by a sharp increase in 2024. A lower DSO signifies a faster collection of accounts receivable, while a higher DSO suggests slower collections, potentially due to credit policy changes or difficulties with customer payments.
Number of Days of Payables: The information for the Number of Days of Payables for the company is missing for 2024 and 2023. However, from the available data, it can be observed that the number of days of payables has been decreasing over the years, indicating that the company is taking less time to pay off its suppliers. This could be a strategic move to manage cash flow or negotiate better payment terms.
In summary, based on the activity ratios analyzed, Alpha and Omega Semiconductor Ltd may need to focus on improving inventory turnover, optimizing accounts receivable collection, and managing payables effectively to enhance overall operational efficiency and financial performance.
Long-term
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.95 | 1.93 | 2.44 | 1.50 | 1.13 |
| Total asset turnover | 0.57 | 0.58 | 0.60 | 0.72 | 0.59 |
The fixed asset turnover ratio for Alpha and Omega Semiconductor Ltd has shown a fluctuating trend over the past five years, ranging from 1.13 in 2020 to 2.44 in 2022, indicating varying levels of effectiveness in utilizing fixed assets to generate revenue. The ratio indicates that the company generated $1.95 in sales for every $1 of fixed assets in 2024, slightly higher than the previous year but lower than the peak in 2022.
In contrast, the total asset turnover ratio has also displayed a declining trend over the same period, decreasing from 0.72 in 2021 to 0.57 in 2024. This suggests that the company's overall efficiency in generating sales from its total assets has been gradually decreasing. The ratio indicates that for every $1 of total assets, the company generated $0.57 in sales in 2024, the lowest ratio in the five-year period analyzed.
Overall, both the fixed asset turnover and total asset turnover ratios reflect mixed performance in terms of asset utilization efficiency for Alpha and Omega Semiconductor Ltd over the past five years. The company should closely monitor these ratios to ensure optimal utilization of assets and strive for improvements in efficiency to enhance profitability and financial performance.