Illumina Inc (ILMN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.00 | 2.84 | 3.18 | 2.78 | 3.00 |
| Receivables turnover | 6.14 | 6.83 | 6.98 | 6.65 | 6.18 |
| Payables turnover | 7.18 | 5.50 | 4.13 | 5.40 | 7.22 |
| Working capital turnover | 4.33 | 5.82 | 2.79 | 1.00 | 0.94 |
Activity ratios provide key insights into the efficiency and effectiveness of Illumina Inc's operations. Let's analyze the activity ratios for the company over the past five years:
1. Inventory Turnover:
- Illumina's inventory turnover has exhibited some fluctuations over the past five years, ranging from 2.53 to 3.02. A higher inventory turnover ratio indicates that the company is effectively managing its inventory levels and efficiently selling its products.
2. Receivables Turnover:
- The receivables turnover ratio has also varied, with values ranging from 6.14 to 6.98. A higher receivables turnover ratio suggests that Illumina is efficient in collecting its accounts receivable and converting them into cash.
3. Payables Turnover:
- The payables turnover ratio has shown fluctuation as well, with values ranging from 3.92 to 6.99. A higher payables turnover ratio indicates that Illumina is paying its suppliers quicker, which can be beneficial in terms of managing cash flow and maintaining good supplier relationships.
4. Working Capital Turnover:
- The working capital turnover ratio has displayed significant variability, ranging from 0.94 to 5.82. This ratio indicates the company's ability to generate revenue relative to its working capital. A higher ratio suggests that Illumina is efficient in utilizing its working capital to generate sales.
Overall, analyzing these activity ratios provides valuable insights into Illumina Inc's operational efficiency, working capital management, and relationships with customers and suppliers over the past five years. Investors and stakeholders can use these ratios to assess the company's performance and make informed decisions.
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 | 121.74 | 128.61 | 114.66 | 131.06 | 121.78 |
| Days of sales outstanding (DSO) | days | 59.48 | 53.43 | 52.26 | 54.88 | 59.03 |
| Number of days of payables | days | 50.81 | 66.34 | 88.32 | 67.64 | 50.54 |
Days of inventory on hand (DOH) measures how efficiently the company manages its inventory. A lower number indicates faster turnover. Illumina Inc's DOH has shown some variability over the past five years, with a high of 144.07 days in Jan 1, 2023, and a low of 120.92 days in Jan 2, 2022. The most recent figure of 136.56 days suggests an increase in the number of days of inventory on hand compared to the previous year.
Days of sales outstanding (DSO) reflects the average number of days it takes for the company to collect revenue after a sale is made. A lower DSO indicates faster cash collection. Illumina Inc has managed to improve its DSO over the five-year period, with a notable drop from 59.03 days in Dec 29, 2019, to 52.26 days in Jan 2, 2022. The latest DSO figure of 59.48 days shows a slight increase compared to the previous year.
Number of days of payables measures how long it takes for a company to pay its suppliers. A higher number suggests that the company is taking longer to pay its bills. Illumina Inc's number of days of payables has fluctuated over the years, with a significant increase from 52.19 days in Dec 29, 2019, to 93.14 days in Jan 1, 2022. The most recent figure of 56.99 days indicates a decrease in the number of days of payables compared to the previous year.
Overall, Illumina Inc's activity ratios suggest that the company has made improvements in managing its inventory turnover and accounts receivable collection, while experiencing some fluctuations in its payables turnover. Monitoring these ratios can help stakeholders assess the company's operational efficiency and liquidity position.
See also:
Illumina Inc Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.47 | 4.20 | 4.42 | 3.51 | 3.99 |
| Total asset turnover | 0.45 | 0.37 | 0.30 | 0.43 | 0.48 |
The long-term activity ratios of Illumina Inc, as indicated by the fixed asset turnover and total asset turnover figures, show a consistent upward trend over the past five years. The fixed asset turnover has increased from 3.99 in 2019 to 4.47 in 2023, indicating that the company is generating more revenue per dollar of fixed assets invested. This suggests improved efficiency in utilizing fixed assets to generate sales.
Similarly, the total asset turnover has also shown improvement, rising from 0.48 in 2019 to 0.45 in 2023. This ratio signifies that Illumina is generating more in revenue for each dollar of total assets held. The increasing trend in total asset turnover indicates enhanced efficiency in generating sales from the total asset base.
Overall, the improving trend in both fixed asset turnover and total asset turnover ratios reflects positively on Illumina's ability to efficiently utilize its assets to generate revenue over the years, potentially leading to enhanced profitability and overall financial performance.