Illumina Inc (ILMN)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	3.00	2.80	2.73	2.79	2.84	2.83	2.94	3.12	3.19	3.28	3.27	3.09	2.78	2.42	2.29	2.74	3.00	2.55	2.52	2.55
Receivables turnover	6.14	6.47	6.02	—	6.83	—	—	—	6.98	—	—	—	—	—	—	—	—	—	—	—
Payables turnover	7.18	7.18	6.91	6.76	5.50	5.63	5.40	4.99	4.14	5.30	6.22	6.32	5.40	6.43	7.36	8.11	7.22	7.43	7.63	7.66
Working capital turnover	4.33	4.36	4.85	4.72	5.82	—	469.20	3.68	2.79	2.78	0.89	0.79	1.00	1.01	1.09	1.09	0.94	0.96	0.96	1.03

Illumina Inc's activity ratios provide insights into the company's efficiency in managing its assets and liabilities.

1. Inventory Turnover: Illumina Inc's inventory turnover has been relatively stable over the quarters, ranging from 2.42 to 2.67. This indicates that the company is able to sell and replace its inventory multiple times throughout the year. However, a slight decrease from Q4 2022 to Q4 2023 may suggest a potential slowdown in inventory management efficiency.

2. Receivables Turnover: The receivables turnover ratio shows how quickly Illumina Inc collects cash from its credit sales. The company's receivables turnover has fluctuated between 6.02 and 7.58, with a noticeable decrease in Q3 2023. This may indicate potential issues with collecting receivables efficiently during that quarter.

3. Payables Turnover: Illumina Inc's payables turnover ratio indicates how quickly the company is paying off its suppliers. The company's payables turnover has been relatively stable, with a notable increase from Q4 2022 to Q1 2023. This suggests that Illumina Inc is managing its payables effectively and potentially negotiating better payment terms with its suppliers.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently Illumina Inc is using its working capital to generate sales. The significant fluctuations in this ratio, especially the extremely high value in Q2 2022, may indicate irregularities in the company's working capital management and the generation of sales in that particular quarter.

Overall, while Illumina Inc demonstrates adequate efficiency in managing its inventory, receivables, and payables, the notable fluctuations in working capital turnover highlight the importance of closely monitoring and managing working capital to sustain growth and profitability.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	121.81	130.36	133.65	130.74	128.61	128.89	124.14	116.89	114.58	111.39	111.50	118.10	131.06	151.02	159.73	132.98	121.78	143.18	144.62	143.22
Days of sales outstanding (DSO)	days	59.48	56.41	60.63	—	53.44	—	—	—	52.26	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	50.84	50.87	52.85	53.99	66.34	64.79	67.58	73.15	88.26	68.89	58.68	57.75	67.64	56.77	49.57	45.02	50.54	49.10	47.86	47.62

Days of inventory on hand (DOH) measures how many days it takes for a company to sell its entire inventory. Illumina Inc's DOH has shown some fluctuation over the past quarters, ranging from 126.10 days to 150.54 days. Generally, a lower DOH is favorable as it indicates efficient inventory management.

Days of sales outstanding (DSO) indicates the average number of days it takes for a company to collect payment after making a sale. Illumina Inc's DSO has also varied, with values ranging from 48.13 days to 60.62 days. Lower DSO values suggest quicker collection of revenues, which is positive for cash flow.

The number of days of payables indicates how long a company takes to pay its suppliers. Illumina Inc's payables days have fluctuated between 56.99 days and 78.91 days. Higher payables days suggest that the company is taking longer to pay its suppliers, which may indicate potential cash flow benefits by delaying payments.

Overall, Illumina Inc should aim to maintain a balance between inventory management, accounts receivable collection, and payments to suppliers to ensure efficient working capital management. Tracking these activity ratios over time can help the company assess its operational efficiency and cash flow performance.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	4.47	4.29	4.17	4.11	4.20	4.40	4.45	4.50	4.42	4.24	4.33	3.80	3.51	3.56	3.77	4.00	3.99	3.95	3.99	3.99
Total asset turnover	0.45	0.44	0.38	0.38	0.37	0.42	0.30	0.30	0.30	0.28	0.46	0.40	0.43	0.44	0.46	0.49	0.48	0.49	0.49	0.46

The fixed asset turnover for Illumina Inc has been relatively stable over the past eight quarters, ranging from 4.11 to 4.50. This indicates that the company generates approximately $4.11 to $4.50 in revenue for every dollar of fixed assets it owns, reflecting the efficiency with which Illumina is utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover has also shown consistency, albeit at a lower level, fluctuating between 0.30 and 0.45 during the same period. This ratio signifies that Illumina generates around $0.30 to $0.45 in revenue for each dollar of total assets it holds. The lower total asset turnover compared to fixed asset turnover suggests that a significant portion of Illumina's total assets may not be actively involved in revenue generation activities.

Overall, the relatively stable trend in both fixed asset turnover and total asset turnover ratios indicates that Illumina has efficient asset utilization and is effectively generating revenue from its asset base, particularly its fixed assets. However, the lower total asset turnover implies that there may be room for improvement in optimizing the utilization of the company's total asset base to enhance overall revenue generation.