InterDigital Inc (IDCC)

Short-term

Turnover ratios

InterDigital Inc's activity ratios provide insights into how efficiently the company manages its assets and operations. Let's analyze the activity ratios based on the provided data:

1. Inventory Turnover:
- InterDigital's inventory turnover improved from 4.04 in March 2021 to a peak of 6.25 in September 2021 before declining to 3.20 in September 2022.
- The company's inventory turnover fluctuated over the years, indicating varying levels of efficiency in selling inventory.
- The recent data shows an uptick in inventory turnover in December 2023 and September 2024, suggesting improved efficiency in managing and selling inventory during those periods.

2. Receivables Turnover:
- The receivables turnover ratio shows patterns similar to inventory turnover, with fluctuations over the years.
- The company improved its receivables turnover from 4.84 in December 2020 to a peak of 7.76 in September 2021 before decreasing to 2.99 in September 2024.
- A decreasing trend in receivables turnover may indicate potential issues with collecting receivables efficiently or changes in credit policies.

3. Payables Turnover:
- The data indicates that InterDigital did not have meaningful payables turnover information available for analysis.
- The lack of payables turnover data may limit the insights into the company's efficiency in managing its payables.

4. Working Capital Turnover:
- The working capital turnover ratio measures how well a company generates revenue per dollar of working capital.
- InterDigital's working capital turnover ratio fluctuated but generally showed an increasing trend from 0.45 in March 2020 to 1.70 in December 2024.
- The increasing trend in working capital turnover suggests that the company effectively utilizes its working capital to generate sales over the years.

In summary, InterDigital Inc's activity ratios reflect fluctuations in efficiency in managing inventory, receivables, and working capital over the years. Improvements in inventory and working capital turnover ratios indicate enhanced operational efficiency, while fluctuations in receivables turnover may require further analysis to understand potential challenges in managing receivables effectively. The absence of payables turnover data limits a comprehensive analysis of the company's payables management efficiency.

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Average number of days

InterDigital Inc's activity ratios provide insights into how efficiently the company manages its inventory, sales, and payables.

1. Days of Inventory on Hand (DOH):
- InterDigital's DOH varied significantly over the evaluated periods, ranging from a low of 58.40 days to a high of 264.75 days.
- A decreasing trend in DOH from December 2021 to September 2022 indicates better inventory management efficiency.
- However, a sharp increase in DOH in June 2022 followed by fluctuations in subsequent periods may suggest challenges in inventory control or demand forecasting.

2. Days of Sales Outstanding (DSO):
- The DSO metric reflects the average number of days it takes for InterDigital to collect revenue from its credit sales.
- The trend in DSO shows fluctuations throughout the periods, indicating varying efficiency in collecting receivables.
- Notably, DSO increased significantly in the latter half of 2022 and 2024, suggesting potential difficulties in efficient collection processes.

3. Number of Days of Payables:
- The absence of payable data suggests that InterDigital may not have significant outstanding payables.
- The company's lack of payables could indicate a favorable position in managing vendor relationships and operational costs without relying heavily on trade credit.

In conclusion, InterDigital Inc's activity ratios reflect fluctuations in inventory management, sales collection efficiency, and potential positive cash flow management practices due to the absence of significant payables. Monitoring and improving these ratios can aid in enhancing overall operational efficiency and financial performance.

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Long-term

InterDigital Inc's long-term activity ratios reflect its efficiency in utilizing fixed assets and total assets to generate revenue. The fixed asset turnover ratio has shown an increasing trend from 30.06 in March 2020 to 46.22 in December 2024. This indicates that the company has been able to generate more sales relative to its investment in fixed assets over the period.

Moreover, the total asset turnover ratio has also exhibited an upward trajectory, starting at 0.21 in March 2020 and reaching 0.47 in December 2024. This signifies that InterDigital Inc has been successful in generating more revenue in proportion to its total assets. Overall, the improvement in both fixed asset turnover and total asset turnover ratios suggests that the company has been effectively utilizing its assets to drive sales growth and enhance operational efficiency.