Dolby Laboratories (DLB)

Short-term

Turnover ratios

Inventory turnover measures how efficiently a company manages its inventory by indicating how many times its inventory is sold and replaced over a specific period. Dolby Laboratories' inventory turnover has decreased from 2019 to 2023, indicating a slower turnover of inventory in recent years.

Receivables turnover reflects the efficiency of a company in collecting outstanding receivables from customers. Dolby Laboratories' receivables turnover has gradually declined from 2019 to 2023, suggesting a longer time taken to collect payments from customers.

Payables turnover indicates how quickly a company pays its suppliers. Dolby Laboratories' payables turnover has fluctuated over the years, with a general decreasing trend from 2019 to 2023. This indicates that the company is taking longer to pay its suppliers.

Working capital turnover measures how effectively a company utilizes its working capital to generate sales. Dolby Laboratories' working capital turnover has varied over the years, with a slight increase from 2020 to 2023. This implies that the company's working capital is being utilized more efficiently in generating sales.

Overall, Dolby Laboratories' activity ratios suggest a mixed performance in managing its inventory, receivables, payables, and working capital over the past five years. The company may need to focus on improving efficiency in managing its inventory, collecting receivables, and paying suppliers to enhance overall operational performance.

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Average number of days

Dolby Laboratories' activity ratios reveal important insights into its operational efficiency over the years. The Days of Inventory on Hand (DOH) increased significantly from 2019 to 2021, indicating a longer duration for which inventory is held before being sold. However, there was a sharp decline in DOH in 2022, which may suggest more efficient inventory management practices that year.

The Days of Sales Outstanding (DSO) have generally been increasing, indicating that the company is taking longer to collect payments from its customers. This trend could potentially indicate issues with accounts receivable management or changing customer payment behaviors.

On the other hand, the Number of Days of Payables remained relatively stable from 2019 to 2022, showing the average number of days the company takes to pay its suppliers. A lower number of days of payables suggests that Dolby Laboratories is paying its suppliers more quickly, which could impact cash flow and liquidity.

Overall, Dolby Laboratories' activity ratios highlight fluctuations in inventory management, accounts receivable collection, and accounts payable practices over the years, emphasizing the importance of monitoring and optimizing these aspects of the business to enhance efficiency and financial performance.

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Long-term

Dolby Laboratories' long-term activity ratios show a fluctuating trend over the past five years. The fixed asset turnover has been generally increasing, indicating that the company is generating more revenue relative to its investments in fixed assets. This suggests improved efficiency in utilizing fixed assets to generate sales.

On the other hand, the total asset turnover has been more volatile, with fluctuations in performance from year to year. The ratio decreased from 0.44 in 2019 to 0.40 in 2020, indicating a decline in the company's ability to generate sales from its total assets. However, there was a slight improvement in 2021 and 2022 before a decrease again in 2023.

Overall, Dolby Laboratories' long-term activity ratios suggest varying levels of efficiency in generating sales from both fixed assets and total assets. Management may want to further investigate the factors contributing to these fluctuations to better understand and potentially improve the company's asset utilization efficiency.