Ciena Corp (CIEN)

Short-term

Turnover ratios

CIENA Corp.'s activity ratios provide insights into how efficiently the company is managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover: The inventory turnover ratio indicates how many times a company sells and replaces its inventory during a specific period. CIENA Corp.'s inventory turnover has been relatively consistent, ranging from 1.88 to 2.54 over the past eight quarters. A higher turnover suggests that the company is efficiently managing its inventory levels.

2. Receivables Turnover: This ratio reflects how quickly a company collects cash from its credit sales. CIENA Corp.'s receivables turnover has ranged from 3.13 to 4.21 over the same period. The increasing trend in receivables turnover indicates that the company has been improving its collection efficiency.

3. Payables Turnover: The payables turnover ratio signifies how quickly a company pays off its suppliers. CIENA Corp.'s payables turnover has fluctuated between 4.02 and 7.89, indicating some variability in the company's payment practices. Generally, a higher turnover ratio suggests more efficient management of payables.

4. Working Capital Turnover: This ratio assesses how efficiently a company utilizes its working capital to generate sales. CIENA Corp.'s working capital turnover has varied between 1.40 and 1.66. A higher turnover ratio indicates that the company is effectively using its working capital to support its operations.

In summary, CIENA Corp.'s activity ratios demonstrate consistent or improving efficiency in managing its inventory, receivables, payables, and working capital over the past eight quarters. This suggests that the company is effectively utilizing its assets and resources to generate revenue.

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Average number of days

CIENA Corp.'s activity ratios provide insight into how efficiently the company manages its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an inconsistent pattern over the past eight quarters, ranging from a low of 93.96 days in Q2 2022 to a high of 194.34 days in Q1 2023.
- In general, the company appears to have a moderate level of inventory turnover, as indicated by the fluctuating DOH figures.
- The decrease in DOH from Q1 2023 to Q3 2022 may suggest an improvement in inventory management efficiency during that period.

2. Days of Sales Outstanding (DSO):
- The DSO values also exhibit variability over the quarters, with values ranging from 86.72 days in Q1 2024 to 116.57 days in Q1 2023.
- The company's ability to collect receivables seems to have improved in Q1 2024 as indicated by the lower DSO compared to the previous quarters.
- Generally, a lower DSO reflects a faster collection of receivables, which is favorable for liquidity and cash flow management.

3. Number of Days of Payables:
- The days of payables trend fluctuates, with values ranging from 46.26 days in Q4 2023 to 90.89 days in Q4 2022.
- The decrease in days of payables from Q4 2022 to Q4 2023 suggests that the company has been settling its payables more quickly during that period.
- Lower days of payables indicate a shorter period within which the company settles its outstanding obligations, which could have implications for working capital management.

In conclusion, CIENA Corp.'s activity ratios reflect varying levels of efficiency in managing its inventory, receivables, and payables over the past eight quarters. Further analysis and comparison with industry benchmarks may provide additional insights into the company's operational performance and financial health.

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Long-term

The fixed asset turnover ratio for CIENA Corp. has been consistently high, ranging from 13.15 to 15.66 over the past eight quarters. This indicates that the company efficiently generates revenue from its investment in fixed assets such as property, plant, and equipment. A high fixed asset turnover ratio suggests that CIENA Corp. is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio has remained relatively stable, ranging from 0.68 to 0.78 over the same period. This indicates that CIENA Corp. is generating revenue at a relatively steady pace relative to its total assets. While a higher total asset turnover ratio is generally preferred, the company's consistent performance in this metric suggests that it is efficiently using both fixed and current assets to generate sales.

Overall, the high fixed asset turnover ratio coupled with the stable total asset turnover ratio indicates that CIENA Corp. is effectively managing its assets to generate revenue. This efficiency in asset utilization is a positive sign for the company and reflects its ability to optimize the use of resources to drive sales growth.