Cirrus Logic Inc (CRUS)

Short-term

Turnover ratios

Cirrus Logic Inc's activity ratios provide insight into how efficiently the company manages its inventory, accounts receivable, accounts payable, and working capital.

1. Inventory Turnover: The inventory turnover ratio measures how many times the company sells and replaces its inventory within a given period. Cirrus Logic's inventory turnover has shown fluctuations over the years, with a peak of 6.20 in March 31, 2022, indicating improvement in inventory management efficiency. However, the ratio decreased to 3.01 by March 31, 2025, which may suggest a slowdown in inventory turnover efficiency.

2. Receivables Turnover: The receivables turnover ratio indicates how quickly the company collects cash from its credit sales. Cirrus Logic's receivables turnover has varied, with a noticeable decrease from 12.61 in March 31, 2023, to 8.78 by March 31, 2025. This could indicate a potential issue with collecting accounts receivable efficiently in recent years.

3. Payables Turnover: The payables turnover ratio evaluates how efficiently the company pays its suppliers. Cirrus Logic's payables turnover has shown an increasing trend over the years, reaching 14.25 by March 31, 2025, indicating the company is taking longer to pay its suppliers.

4. Working Capital Turnover: The working capital turnover ratio measures the efficiency of using working capital to generate revenue. Cirrus Logic's working capital turnover has fluctuated, with a peak of 3.10 in March 31, 2022, but declining to 1.82 by March 31, 2025. A decreasing trend may suggest a less efficient utilization of working capital to generate sales.

Overall, Cirrus Logic Inc's activity ratios show mixed performance in managing its inventory, receivables, payables, and working capital efficiency. Monitoring these ratios over time can help identify trends and areas that may require attention to improve operational efficiency.

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Average number of days

Based on the provided data for Cirrus Logic Inc's activity ratios, we can analyze the following:

1. Days of Inventory on Hand (DOH):
- The average number of days it takes Cirrus Logic Inc to sell its inventory decreased from 95.54 days in March 2021 to 58.90 days in March 2022, indicating an improvement in inventory management efficiency. However, the DOH increased to 121.29 days by March 2025, which suggests a potential increase in excess inventory on hand.

2. Days of Sales Outstanding (DSO):
- The DSO measure indicates the average number of days it takes for Cirrus Logic Inc to collect revenue from sales. The days of sales outstanding increased from 28.98 days in March 2021 to 49.23 days in March 2022, possibly indicating an issue with collections. The DSO improved slightly by March 2025 to 41.58 days, showing better receivables management compared to 2022.

3. Number of Days of Payables:
- The number of days of payables shows how long it takes Cirrus Logic Inc to pay its suppliers. The company improved its payables management significantly from 56.65 days in March 2021 to 25.61 days by March 2025. A decreasing trend in payables days may suggest that the company is paying its suppliers more quickly, which could impact cash flow management and supplier relationships.

In general, the trends in these activity ratios indicate fluctuations in Cirrus Logic Inc's efficiency in managing its inventory, receivables, and payables. A decrease in DOH and DSO can be positive signs of improved working capital management, while a decreasing number of days of payables may have implications for liquidity and supplier relationships. Monitoring these activity ratios over time can provide insights into the company's operational efficiency and financial health.

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Long-term

The Fixed Asset Turnover ratio measures how efficiently Cirrus Logic Inc is utilizing its fixed assets to generate sales. Looking at the trend over the past five years, we see a significant variation. In 2021, the ratio was 8.84, indicating that the company generated $8.84 in sales for every dollar invested in fixed assets. However, in 2022, the ratio decreased to 5.43, suggesting a decline in the efficiency of asset utilization. The ratio then improved substantially in 2023, reaching 11.64, which reflects a significant enhancement in the efficiency of fixed asset utilization. Unfortunately, data for 2024 and 2025 is not available, so we cannot analyze the trend for those years.

On the other hand, the Total Asset Turnover ratio provides insight into how efficiently Cirrus Logic Inc is utilizing all its assets to generate sales. The trend for this ratio shows a more stable performance over the past five years. In 2021, the ratio was 0.75, indicating that the company generated $0.75 in sales for every dollar of assets. The ratio improved in the following years, reaching 0.84 in 2022, 0.92 in 2023, and then slightly declined to 0.80 in 2024 and 0.81 in 2025. This suggests that the company has been able to generate more sales relative to its total assets over time, with a slight dip in 2024 and 2025.

Overall, from the data provided, it appears that Cirrus Logic Inc has shown varying levels of efficiency in utilizing its fixed assets to generate sales, with a more consistent performance in terms of total asset turnover. It would be beneficial to obtain more recent data to assess the company's long-term activity ratios more comprehensively.