Broadcom Inc (AVGO)
Activity ratios
Short-term
Turnover ratios
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 10.83 | 5.86 | 5.77 | 8.18 | 10.34 |
| Receivables turnover | 11.68 | 11.36 | 11.22 | 13.25 | 10.40 |
| Payables turnover | 11.47 | 9.20 | 11.13 | 9.77 | 12.41 |
| Working capital turnover | 17.80 | 2.66 | 2.90 | 2.66 | 4.32 |
Broadcom Inc's activity ratios provide insights into the efficiency of the company's management of its operating assets and liabilities. The inventory turnover ratio has shown an increasing trend over the past five years, indicating that the company is selling its inventory more frequently. This suggests effective inventory management and potentially lower holding costs.
The receivables turnover ratio has also seen fluctuations but remains relatively stable. A high receivables turnover ratio indicates that the company is collecting its receivables efficiently. Broadcom Inc has managed to maintain a strong performance in terms of collecting payments from its customers.
On the other hand, the payables turnover ratio has shown some variability but generally reflects a consistent trend. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which can be advantageous in managing cash flows and relationships with suppliers.
The working capital turnover ratio has exhibited significant fluctuations over the years. A higher working capital turnover ratio indicates that the company is effectively using its working capital to generate sales. The substantial increase in this ratio from the previous year suggests that Broadcom Inc has improved its efficiency in utilizing its working capital.
Overall, Broadcom Inc's activity ratios demonstrate a mix of strengths and areas for potential improvement in managing its operating cycle and resources efficiently. The company's ability to maintain and enhance these ratios can contribute to its overall financial performance and competitiveness.
Average number of days
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 33.70 | 62.25 | 63.25 | 44.64 | 35.30 |
| Days of sales outstanding (DSO) | days | 31.25 | 32.14 | 32.52 | 27.54 | 35.10 |
| Number of days of payables | days | 31.82 | 39.68 | 32.79 | 37.37 | 29.42 |
Broadcom Inc's days of inventory on hand (DOH) has fluctuated over the past five years, ranging from a low of 33.70 days to a high of 63.25 days. A decreasing trend is observed from 2022 to 2023, followed by a significant decrease in 2024. This indicates that the company is managing its inventory efficiency better in the most recent period compared to the past years.
In terms of days of sales outstanding (DSO), Broadcom Inc has maintained a relatively stable range between 27.54 days and 35.10 days over the past five years. This indicates that the company is consistent in collecting its accounts receivable, with little variation in the time taken to convert sales into cash.
The number of days of payables for Broadcom Inc has also shown some fluctuation but has generally shown a decreasing trend from 2020 to 2024. This suggests that the company is taking longer to pay its suppliers over time, which could indicate a more favorable position in terms of working capital management.
Overall, the analysis of Broadcom Inc's activity ratios reveals that the company has made improvements in managing its inventory and payables effectively, while maintaining a consistent performance in collecting accounts receivable.
See also:
Broadcom Inc Short-term (Operating) Activity Ratios
Long-term
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 20.46 | 16.63 | 14.94 | 11.69 | 9.52 |
| Total asset turnover | 0.31 | 0.49 | 0.45 | 0.36 | 0.31 |
Broadcom Inc's long-term activity ratios, specifically the fixed asset turnover and total asset turnover, provide insights into how efficiently the company utilizes its assets to generate sales.
The fixed asset turnover ratio has shown a consistent improving trend over the past five years, increasing from 9.52 in 2020 to 20.46 in 2024. This indicates that Broadcom has been able to generate more sales revenue for each dollar invested in fixed assets. The significant increase in fixed asset turnover suggests that the company has been effectively utilizing its long-term assets to drive revenue growth.
On the other hand, the total asset turnover ratio has fluctuated over the same period, ranging from 0.31 in 2020 to 0.49 in 2023 before declining to 0.31 in 2024. This ratio signifies how effectively the company is using all assets, both fixed and current, to generate sales. The decrease in total asset turnover in 2024 may indicate that Broadcom's overall asset utilization efficiency has weakened compared to the previous year.
Overall, while the fixed asset turnover ratio reflects consistent improvement and efficient utilization of long-term assets, the fluctuating trend in total asset turnover suggests variations in the company's overall asset management efficiency. Further analysis would be required to understand the underlying factors driving these changes and their implications for Broadcom's long-term operational performance.