FormFactor Inc (FORM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.48 | 3.62 | 3.67 | 4.01 | 4.09 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 1.61 | 1.50 | 2.30 | 2.05 | 2.09 |
FormFactor Inc's activity ratios provide insight into how effectively the company is managing its resources and generating revenue.
1. Inventory Turnover:
- FormFactor's inventory turnover has shown a slight decline from 4.09 in 2020 to 3.62 in 2023, before experiencing an increase to 4.48 in 2024. This indicates that the company is selling its inventory at a slower pace in 2023, but has improved efficiency in 2024 by selling inventory more quickly.
2. Receivables Turnover:
- The data shows that receivables turnover is not provided for any of the years, which could suggest that the company does not maintain a significant amount of accounts receivable or may have a different approach to managing its receivables.
3. Payables Turnover:
- Similarly, payables turnover data is not available for any of the years, which may indicate that FormFactor Inc does not have a detailed breakdown of payables turnover or has a different payment strategy with suppliers.
4. Working Capital Turnover:
- FormFactor's working capital turnover has fluctuated over the years, with a peak of 2.30 in 2022 and a low of 1.50 in 2023. This ratio measures how effectively the company is using its working capital to generate sales. The variations in this ratio indicate changes in the efficiency of the company's working capital management over time.
In conclusion, while the company's inventory turnover and working capital turnover ratios show some fluctuations, the lack of data for receivables and payables turnover makes it challenging to provide a comprehensive analysis of FormFactor Inc's overall activity ratios. Further information and analysis may be needed to better understand the company's financial performance in terms of activity ratios.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 81.44 | 100.77 | 99.47 | 91.10 | 89.28 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
FormFactor Inc's activity ratios provide insights into how efficiently the company manages its inventory and cash cycle.
1. Days of Inventory on Hand (DOH):
- FormFactor Inc's DOH has shown a slight increase over the years from 89.28 days in 2020 to 81.44 days in 2024.
- A higher DOH value indicates that the company is taking longer to turn its inventory into sales, which could tie up working capital and increase holding costs.
- The increasing trend in DOH suggests the company may be facing challenges in managing its inventory levels efficiently.
2. Days of Sales Outstanding (DSO):
- Data for DSO is not provided for any of the years, indicating that specific information is not available to calculate this ratio.
- DSO is a measure of how long it takes the company to collect its accounts receivable, and a higher DSO could indicate potential issues with collecting sales revenue promptly.
3. Number of Days of Payables:
- Like DSO, data for the number of days of payables is not provided for any of the years, implying that specific information is not available to calculate this ratio.
- A longer payment period to suppliers could indicate that FormFactor Inc is effectively using trade credit to manage its cash flow and working capital.
In summary, the analysis suggests that FormFactor Inc may need to focus on improving its inventory management to reduce DOH and potentially address any challenges related to accounts receivable collection and payables management to enhance overall operational efficiency.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 3.94 | 4.23 | 6.66 |
| Total asset turnover | 0.67 | 0.60 | 0.74 | 0.75 | 0.72 |
FormFactor Inc's fixed asset turnover ratio has exhibited a declining trend over the years. In 2020, the company achieved a high fixed asset turnover of 6.66, indicating that it generated $6.66 in sales for every $1 of fixed assets. However, this ratio decreased to 4.23 in 2021 and further to 3.94 in 2022, reflecting a diminishing efficiency in utilizing fixed assets to generate sales.
On the other hand, the total asset turnover ratio, which measures how efficiently the company utilizes all assets to generate revenue, has shown fluctuation. The ratio increased from 0.72 in 2020 to 0.75 in 2021 and then slightly declined to 0.74 in 2022. However, there was a significant drop to 0.60 in 2023 before rebounding to 0.67 in 2024.
The decreasing trend in fixed asset turnover suggests that FormFactor Inc may be experiencing challenges in optimizing the productivity of its fixed assets. However, the fluctuating trend in total asset turnover indicates varying levels of efficiency in utilizing all assets to generate sales. Management should analyze the reasons behind these fluctuations and implement strategies to improve asset utilization efficiency for sustainable long-term growth.