Arlo Technologies (ARLO)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its resources. Let's analyze the activity ratios of Arlo Technologies based on the provided data:

1. Inventory Turnover:
- Inventory turnover measures how many times a company sells and replaces its inventory during a specific period. A higher ratio indicates efficient management of inventory.
- Arlo Technologies' inventory turnover improved from 4.66 in 2020 to 8.52 in 2021, showing a significant increase in the efficiency of inventory management.
- Although there was a slight decrease in 2024 to 7.96, the overall trend indicates effective utilization of inventory resources over the years.

2. Receivables Turnover:
- Receivables turnover ratio reflects how efficiently a company collects its accounts receivable. A higher ratio implies faster collection of sales on credit.
- The data provided does not include receivables turnover for Arlo Technologies, so we cannot evaluate the efficiency of the company in collecting receivables.

3. Payables Turnover:
- Payables turnover ratio measures how quickly a company pays its suppliers. A higher ratio may indicate that the company takes longer to pay its suppliers, which can sometimes suggest favorable credit terms.
- The absence of payables turnover data for Arlo Technologies prevents us from assessing how quickly the company settles its payables.

4. Working Capital Turnover:
- Working capital turnover ratio assesses how efficiently a company utilizes its working capital to generate revenue. A higher ratio suggests better utilization of resources.
- Arlo Technologies' working capital turnover improved from 3.00 in 2020 to 6.96 in 2022, indicating a significant enhancement in converting working capital into revenue.
- In 2024, the ratio decreased slightly to 5.95, but overall, the company showed a consistent ability to generate revenue using its working capital efficiently.

In conclusion, Arlo Technologies demonstrated improvements in inventory turnover and working capital turnover, indicating enhanced efficiency in managing inventory and working capital over the years. However, the absence of data on receivables turnover and payables turnover limits our ability to provide a comprehensive analysis of all aspects of the company's activity ratios.

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Average number of days

Arlo Technologies' activity ratios provide insight into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
- In 2020, Arlo had 78.26 days of inventory on hand, indicating that it took the company almost 78 days to sell its inventory.
- The DOH decreased significantly to 42.84 days in 2021, suggesting an improvement in inventory management efficiency.
- However, the DOH slightly increased to 47.95 days in 2022 and then decreased to 43.32 days in 2023, indicating some fluctuations in inventory turnover.
- By the end of 2024, the DOH stood at 45.86 days, showing a moderate increase compared to 2023.

2. Days of Sales Outstanding (DSO):
- The data provided does not contain information on Arlo's Days of Sales Outstanding for the years under review. As a result, we are unable to assess the company's efficiency in collecting accounts receivable over this period.

3. Number of Days of Payables:
- Similar to DSO, data regarding Arlo's Number of Days of Payables is not available for the years analyzed, limiting our ability to evaluate the company's payment terms with suppliers during this timeframe.

Overall, the decreasing trend in Arlo's Days of Inventory on Hand from 2020 to 2023 suggests improvements in inventory management efficiency. However, investors and analysts would benefit from additional information on Days of Sales Outstanding and Number of Days of Payables to gain a more comprehensive understanding of Arlo Technologies' overall activity ratios and operational performance.

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Long-term

The fixed asset turnover ratio measures how efficiently a company generates revenue from its fixed assets. Arlo Technologies' fixed asset turnover ratio has shown a fluctuating trend over the years. In 2020, the ratio was 22.57, indicating that the company generated $22.57 in revenue for every dollar of fixed assets. However, this ratio decreased to 17.83 in 2021 and then experienced a significant increase to 66.85 in 2022. Unfortunately, data is unavailable for 2023 and 2024.

On the other hand, the total asset turnover ratio reflects how well a company utilizes its total assets to generate revenue. Arlo Technologies' total asset turnover ratio has generally been increasing over the years. In 2020, the ratio was 0.86, indicating that the company generated $0.86 in revenue for every dollar of total assets. This ratio improved to 1.25 in 2021, 1.80 in 2022, and then slightly decreased to 1.72 in 2023 and 1.71 in 2024.

Overall, Arlo Technologies has shown varying efficiency in utilizing its fixed assets to generate revenue, with a notable jump in the fixed asset turnover ratio in 2022. In contrast, the company has been improving its effectiveness in utilizing total assets to generate revenue over the years, as evidenced by the increasing trend in the total asset turnover ratio.