InterDigital Inc (IDCC)

Short-term

Turnover ratios

InterDigital Inc's activity ratios provide insight into how efficiently the company is managing its assets and operations.

1. Inventory Turnover:
- The inventory turnover ratio measures how effectively a company is managing its inventory. In 2021, the ratio was 1.38, indicating that InterDigital converted its inventory into sales 1.38 times during the year.
- In 2023, the ratio significantly improved to 3.50, suggesting that the company managed its inventory more efficiently that year.

2. Receivables Turnover:
- The receivables turnover ratio indicates how quickly InterDigital is collecting payments from its customers.
- The ratio was relatively stable over the years, ranging from 3.47 to 4.61. This implies that the company's credit and collection policies were consistent.

3. Payables Turnover:
- The payables turnover ratio was not provided in the data, indicating a lack of information regarding how effectively InterDigital is managing its accounts payable.

4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently InterDigital is utilizing its working capital to generate sales.
- The ratio improved from 0.47 in 2020 to 1.73 in 2024, indicating that the company generated more sales per unit of working capital over the years.

Overall, the activity ratios suggest that InterDigital has been improving its inventory management and working capital efficiency, while maintaining a steady pace in collecting payments from customers. Further analysis of payables turnover would provide a more comprehensive assessment of the company's operational efficiency.

---

Average number of days

InterDigital Inc's activity ratios provide insights into how efficiently the company manages its assets and operations.

1. Days of Inventory on Hand (DOH):
- For December 31, 2021, the company had inventory on hand for an average of 264.87 days, indicating a relatively high level of inventory compared to its sales. This could potentially signal slow-moving inventory or inefficiencies in inventory management.
- In contrast, the company had lower days of inventory on hand for December 31, 2023, with only 104.37 days. This suggests an improvement in inventory turnover efficiency, possibly due to better inventory management practices.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding for InterDigital Inc increased from 77.10 days on December 31, 2020, to 85.87 days on December 31, 2024. This indicates that it took the company longer to collect its accounts receivable over the years, which may signal potential issues with credit policies or collection procedures.

3. Number of Days of Payables:
- The data provided does not show any information regarding the number of days of payables for InterDigital Inc across the years, suggesting that the company may not have outstanding payables or the information is not available.

Overall, analyzing these activity ratios can help stakeholders assess the efficiency of InterDigital Inc's working capital management and identify areas for improvement in inventory turnover, accounts receivable collection, and payables management.

---

Long-term

InterDigital Inc's long-term activity ratios reflect its efficiency in utilizing fixed assets and total assets to generate sales revenue.

1. Fixed Asset Turnover: The trend in InterDigital's fixed asset turnover ratio shows a significant increase over the years, indicating that the company is becoming more efficient in generating sales from its fixed assets. The ratio has improved from 19.81 in 2020 to 46.99 in 2024, showing a consistent upward trend.

2. Total Asset Turnover: In terms of total asset turnover, InterDigital's ratio initially increased from 0.20 in 2020 to 0.25 in 2021, indicating an improvement in utilizing total assets to generate sales. However, the ratio dropped in 2022 to 0.21 before increasing to 0.29 in 2023 and further to 0.47 in 2024, indicating fluctuations in asset efficiency.

Overall, the increasing trend in fixed asset turnover ratio signifies improved efficiency in utilizing fixed assets, while the fluctuations in total asset turnover ratio suggest varying levels of efficiency in utilizing total assets. Further analysis of the company's asset management strategies and operational efficiency may be warranted to understand the factors driving these trends.