Broadcom Inc (AVGO)

Activity ratios

Short-term

Turnover ratios

	Feb 4, 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	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Inventory turnover	6.67	5.86	6.10	6.00	5.98	5.77	5.92	6.40	6.95	8.18	9.10	10.44	11.01	10.34	9.51	10.76	10.73	11.57	9.16	9.63
Receivables turnover	7.82	11.36	12.17	11.56	10.64	11.22	11.70	—	11.23	13.25	—	—	9.78	10.40	—	—	—	—	—	—
Payables turnover	8.56	9.20	11.34	13.62	12.31	11.13	15.27	9.98	9.80	9.77	10.91	12.63	11.67	12.41	9.41	8.33	10.28	11.83	10.04	13.13
Working capital turnover	5.70	2.66	3.23	3.38	3.03	2.90	3.58	3.80	3.15	2.66	2.90	3.27	3.25	4.32	3.32	3.00	5.19	7.49	8.51	10.03

Broadcom Inc's activity ratios provide insights into how effectively the company manages its assets and liabilities to generate sales and support operations.

1. Inventory turnover:
- Broadcom Inc's inventory turnover has been relatively stable over the past few years, ranging from 5.77 to 11.01 times. This indicates that the company efficiently manages its inventory levels and replenishment cycles to support sales. A higher turnover generally reflects effective inventory management.

2. Receivables turnover:
- The receivables turnover ratio shows how efficiently Broadcom collects cash from its credit sales. The ratios vary significantly over the periods provided, from 7.82 to 13.25 times. Higher turnover ratios suggest effective credit policies and collection procedures, enabling the company to quickly convert credit sales into cash.

3. Payables turnover:
- Broadcom Inc's payables turnover ratios have fluctuated between 8.33 and 15.27 times, indicating the efficiency of the company in managing its accounts payable. A higher turnover ratio typically indicates that the company is paying its suppliers more quickly, which can result in favorable terms and relationships.

4. Working capital turnover:
- The working capital turnover ratio reflects how efficiently Broadcom utilizes its working capital to generate sales. The ratios have varied from 2.66 to 10.03 times, with higher turnover ratios indicating more effective utilization of working capital. A higher turnover might suggest that the company is effectively managing its current assets and liabilities to support its operations and growth.

In summary, Broadcom Inc's activity ratios demonstrate the company's effectiveness in managing its inventory, receivables, payables, and working capital to support its sales and operations. The stability and fluctuations in these ratios over time provide valuable insights into the company's operational efficiency and financial health.

Average number of days

		Feb 4, 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	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Days of inventory on hand (DOH)	days	54.73	62.25	59.79	60.83	61.00	63.25	61.70	57.05	52.54	44.64	40.11	34.96	33.15	35.30	38.40	33.93	34.02	31.54	39.83	37.88
Days of sales outstanding (DSO)	days	46.67	32.14	30.00	31.57	34.30	32.52	31.20	—	32.52	27.54	—	—	37.32	35.10	—	—	—	—	—	—
Number of days of payables	days	42.65	39.68	32.20	26.80	29.65	32.79	23.90	36.56	37.26	37.37	33.47	28.90	31.27	29.42	38.79	43.79	35.50	30.86	36.36	27.81

Days of Inventory on Hand (DOH) for Broadcom Inc has shown fluctuations over the past 2 years, ranging from a high of 63.25 days to a low of 31.54 days. This ratio indicates the average number of days it takes for the company to sell its inventory, with lower numbers generally being more favorable as they suggest efficient inventory management.

Days of Sales Outstanding (DSO) has varied in the range of 30.00 to 46.67 days, reflecting the average number of days it takes for Broadcom to collect payments from its customers. Lower DSO values are preferred as they indicate faster collection of receivables, implying effective credit management practices.

The Number of Days of Payables has also displayed fluctuations, ranging from 23.90 to 43.79 days, representing the average number of days it takes for Broadcom to settle its payables. A longer payment period may indicate better cash flow management, but extreme delays could signal potential liquidity issues or strained supplier relationships.

Analyzing these activity ratios collectively provides insights into Broadcom Inc's efficiency in managing its inventory, collecting revenues, and managing its payables. The company's ability to balance these aspects effectively can impact its liquidity position, operational performance, and overall financial health. Tracking these ratios over time can help identify trends and areas for potential improvement in Broadcom's working capital management.

Long-term

	Feb 4, 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	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Fixed asset turnover	14.60	16.63	16.26	15.86	15.63	14.94	14.08	13.26	12.38	11.69	11.19	10.58	9.89	9.52	9.04	8.74	8.66	8.81	8.53	8.22
Total asset turnover	0.22	0.49	0.50	0.49	0.47	0.45	0.44	0.42	0.39	0.36	0.35	0.34	0.32	0.31	0.29	0.28	0.28	0.33	0.32	0.31

Broadcom Inc's long-term activity ratios provide insights into the efficiency of the company in utilizing its assets to generate sales.

- Fixed asset turnover: This ratio measures how efficiently the company generates sales from its fixed assets. The trend shows a fluctuating performance, with a peak of 16.63 in October 2023 and a low of 8.22 in August 2019. The company seems to have improved its efficiency in utilizing fixed assets over time, with a general upward trend in recent periods.

- Total asset turnover: This ratio indicates the company's ability to generate sales from all its assets. The trend also shows fluctuations, with the highest ratio of 0.50 in July 2023 and the lowest of 0.28 in both August 2020 and May 2020. The total asset turnover has generally improved over the analyzed periods, indicating that Broadcom Inc has been more efficient in utilizing all its assets in generating sales.

Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios suggest that Broadcom Inc has become more efficient in generating sales from its assets over time. However, investors and analysts should continue to monitor these ratios to ensure sustainable and consistent operational efficiency.