InterDigital Inc (IDCC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.50 | — | 1.38 | — | — |
| Receivables turnover | 3.77 | 3.47 | 4.61 | 4.73 | 7.39 |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 1.80 | 0.38 | 0.60 | 0.47 | 0.40 |
Interdigital Inc's activity ratios reveal insights into the management of its assets and liabilities over the past five years.
1. Receivables Turnover:
- The receivables turnover ratio measures how efficiently a company collects its accounts receivable.
- Interdigital Inc's receivables turnover has been fluctuating over the years, standing at 4.01 in 2023, down from 4.82 in 2021 and up from 3.44 in 2022.
- A higher receivables turnover ratio indicates that the company is collecting its receivables more quickly, which can improve cash flow and reduce the risk of bad debts.
2. Payables Turnover:
- The payables turnover ratio indicates how efficiently a company pays its suppliers.
- It appears that Interdigital Inc has a payables turnover ratio of 0.00 consistently across all years, which could imply that the company may not have significant trade payables or that the data is not available.
3. Working Capital Turnover:
- The working capital turnover ratio evaluates how effectively a company utilizes its working capital to generate sales.
- Interdigital Inc's working capital turnover has shown improvement over the years, reaching 1.92 in 2023 compared to 0.45 in 2019.
- A higher working capital turnover ratio signifies that the company is efficiently managing its working capital to support its operations and revenue generation.
In summary, while Interdigital Inc has shown some fluctuations in its receivables turnover, an improvement in working capital turnover indicates a more efficient use of assets to support sales generation. However, the lack of data for payables turnover limits a comprehensive assessment of the company's efficiency in managing its payables. Monitoring these activity ratios can help investors and stakeholders gauge the company's operational efficiency and financial performance over time.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 104.37 | — | 264.87 | — | — |
| Days of sales outstanding (DSO) | days | 96.82 | 105.33 | 79.12 | 77.10 | 49.39 |
| Number of days of payables | days | — | — | — | — | — |
Days of inventory on hand (DOH) is not provided in the data table, hence, we cannot analyze Interdigital Inc's efficiency in managing its inventory turnover.
Days of sales outstanding (DSO) has shown fluctuation over the past five years, with 91.07 days in 2023, 106.00 days in 2022, 75.71 days in 2021, 87.03 days in 2020, and 32.36 days in 2019. This ratio indicates the average number of days it takes for the company to collect revenue after making a sale. A higher DSO could indicate potential issues with collecting receivables efficiently, which may impact the company's cash flow.
The number of days of payables is not provided in the data table, making it impossible to analyze Interdigital Inc's efficiency in managing its payable turnover and relationships with suppliers.
In conclusion, Interdigital Inc may need to focus on improving its collection process to reduce DSO and enhance cash flow management. Further information on inventory turnover and payables turnover would provide a more comprehensive assessment of the company's working capital management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 44.70 | 35.85 | 30.43 | 19.81 | 27.50 |
| Total asset turnover | 0.29 | 0.21 | 0.25 | 0.20 | 0.17 |
Interdigital Inc's long-term activity ratios have shown significant fluctuations over the past five years. The fixed asset turnover ratio, which measures how efficiently the company generates revenue from its fixed assets, has generally been increasing, reaching a high of 47.52 in 2023 from 31.22 in 2019. This suggests that the company has improved its utilization of fixed assets to generate more sales.
On the other hand, the total asset turnover ratio, which assesses the company's overall efficiency in using all its assets to generate revenue, has been more erratic. The ratio peaked at 0.31 in 2023, indicating that the company generated $0.31 of revenue for every $1 of assets, which is a positive trend compared to previous years.
Overall, the increasing trend in fixed asset turnover and the varying trend in total asset turnover suggest that Interdigital Inc has been improving its operational efficiency and asset utilization over the years, which may lead to enhanced profitability and return on investment in the long term. However, further analysis and comparison with industry benchmarks would provide a more comprehensive evaluation of the company's performance.