Alpha and Omega Semiconductor Ltd (AOSL)

Short-term

Turnover ratios

The activity ratios of Alpha and Omega Semiconductor Ltd over the specified periods reveal several insights into the company's operational efficiency and management of working capital.

Inventory Turnover:
The inventory turnover ratio exhibits relative stability with moderate fluctuations over the analyzed timeframe. Starting at approximately 2.76 times in September 2020, the ratio shows a gradual upward trend culminating around 2.82 by June 2025. Notable increases occur in December 2021 (3.72) and March 2022 (3.45), indicating periods of more efficient inventory management, potentially due to improved demand forecasting or inventory control measures. Conversely, the ratio dips to recent lows near 2.43 in March 2024, suggesting periods where inventory held relative to sales was higher or sales velocity slowed. Overall, the ratio remains within a narrow band, indicating consistent inventory management with slight improvements over time.

Receivables Turnover:
The receivables turnover ratio exhibits significant fluctuation. It peaks notably at 45.92 in March 2024, the highest value in the dataset, implying highly efficient collection processes during this period. The ratio varies from lows of around 12.59 (December 2021) to peaks exceeding 40 in early 2024. Periods of rapid receivables collection correspond with higher ratios, indicating effective credit management and collection practices. Conversely, lower ratios prior to the surge may reflect more extended credit periods or less aggressive collection efforts.

Payables Turnover:
The payables turnover ratio displays variability, with an upward trend generally observed, especially from December 2020 (4.73) to March 2024 (11.35). This increase indicates that the company is paying its suppliers more frequently or promptly over time. An exceptionally high value is observed in June 2025 (8,912.76), which appears anomalous and likely reflects a data error or extraordinary accounting adjustment rather than operational reality. Overall, increased payables turnover suggests improved cash management and supplier relations, with shorter periods of extending payables.

Working Capital Turnover:
The working capital turnover ratio fluctuates within a range around 2.39 to 3.77. It shows an initial decline from 3.74 in September 2020 to a low of 2.39 in March 2022, followed by stabilization around 2.75 to 2.80 in subsequent periods. Notably, towards June 2025, the ratio drops significantly to 1.77, indicating a reduced utilization of working capital to generate sales or possibly increased working capital investment outpacing sales growth. This variation reflects shifts in operational efficiency, sales volume, or working capital management strategies.

In aggregate, these activity ratios suggest that Alpha and Omega Semiconductor Ltd has maintained relatively stable inventory and working capital management, with periodic improvements in receivables collection efficiency. The fluctuations in receivables and payables turnover ratios highlight operational adjustments and strategic shifts in credit and payment policies. The anomalous data point in payables turnover likely warrants verification, but overall, the ratios depict a company actively managing its assets and working capital to support ongoing operations.

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Average number of days

The activity ratios of Alpha and Omega Semiconductor Ltd, as represented by the key operating cycle metrics—Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Days of Payables—demonstrate notable trends over the observed period from September 2020 through June 2025.

Inventory Management (DOH):
The company’s inventory holding period exhibits fluctuations over the analyzed timeframe. Starting at approximately 132.15 days in September 2020, there is a mild upward trend culminating in a peak near 149.96 days by March 2024. This indicates a gradual increase in the average duration inventory remains unsold, potentially reflecting changes in inventory policy, production cycles, or demand variances. Post-peak, a slight decrease to around 132.09 days by March 2025 suggests an effort to optimize inventory levels, yet the overall period remains elevated compared to the initial figure, implying a comparatively extended inventory turnover cycle.

Receivables Collection (DSO):
The Days Sales Outstanding initially fluctuates within a relatively narrow range (approximately 16.99 to 28.99 days between December 2020 and December 2021), indicating stable collection periods in that interval. A significant reduction occurs in subsequent periods, particularly in March 2024, when DSO diminishes sharply to approximately 7.95 days, and nearly reaches 0.02 days by June 2025. This drastic contraction suggests substantial improvements in receivables collection efficiency, possibly due to enhanced credit management, customer payment terms, or changes in sales channels.

Payables Management:
The number of days of payables shows a general declining trend from around 84.07 days in September 2020 to approximately 29.51 days by December 2024. This reduction indicates an increasing propensity of the company to settle its payables faster over time. The decline nearly stabilizes at around 35 days in early 2025, reflecting a more conservative or optimized working capital management practice. Notably, a sharp decrease to near zero days in June 2025 appears to be an anomaly or a data point requiring contextual clarification.

Overall Activity Cycle:
The combined analysis of these ratios suggests that the company's operating cycle has experienced structural shifts over the period. The rising inventory days imply holding stocks longer, whereas the decreasing receivables days and payables days point toward improved cash flow management and possibly expedited collections and payments. The significant reduction in DSO late in the period indicates enhanced receivables management efficiency, which can positively impact liquidity. Conversely, the increasing inventory period could tie up more capital in stock, suggesting a potential area for operational optimization.

Concluding Remarks:
These trends highlight a strategic or operational transition within Alpha and Omega Semiconductor Ltd, balancing inventory holdings with receivables and payables management. Continuous monitoring and targeted efficiencies could further enhance the overall activity cycle, capitalizing on improved receivables collection while managing inventory levels effectively.

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Long-term

The long-term activity ratios of Alpha and Omega Semiconductor Ltd, as reflected by its Fixed Asset Turnover and Total Asset Turnover figures across various periods, exhibit notable trends and fluctuations over time.

Starting with the Fixed Asset Turnover ratio, there is a clear upward trajectory from September 2020 through September 2021, rising from 1.18 to 1.57. This indicates an improving efficiency in utilizing fixed assets to generate sales during this period. The ratio then experiences a significant increase to 3.32 by December 2021, suggesting a substantial enhancement in the use of fixed assets to support higher sales volumes or more effective asset management. However, post-December 2021, the ratio declines sharply to 3.10 in March 2022 and continues decreasing through June 2022 to 2.27 and further to 2.20 by September 2022. From this point onwards, the ratio stabilizes in the low 2's, with values fluctuating modestly around 2.00 to 2.26 up to the latest reported period in March 2023. The overall trend indicates that while there was significant efficiency gain during 2021, subsequent periods saw a normalization or slight deterioration in fixed asset utilization, possibly reflecting expansion, asset aging, or operational shifts.

In terms of the Total Asset Turnover, the ratio generally shows a gradual increase over time. Starting at 0.61 in September 2020, it steadily progresses to 0.69 by March 2021, and continues upward modestly to 0.72 in June 2021, then to 0.70 in September 2021, and dips slightly to 0.65 by December 2021. The ratio then hovers around 0.60 to 0.62 through 2022, indicating a relatively stable total asset efficiency with minor fluctuations. From March 2023 onward, the ratio improves, reaching 0.61 and eventually rising to 0.67 in June 2025, which implies that the company has been increasingly effective in generating sales from its total asset base in recent periods.

In summary, Alpha and Omega Semiconductor Ltd experienced a significant enhancement in fixed asset utilization during 2021, but this efficiency waned somewhat subsequently. Conversely, the total asset turnover displayed a steady, gradual improvement over the latter part of the observed timeframe, suggesting overall better asset utilization efficiency or increased sales relative to asset base. The divergence of these ratios indicates that improvements in fixed asset efficiency may have been offset by changes in other asset categories, operational adjustments, or strategic shifts in asset deployment.