Intel Corporation (INTC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.58 | 3.41 | 4.29 | 5.03 | 4.18 |
| Receivables turnover | 15.57 | 14.47 | 8.25 | 11.14 | 9.19 |
| Payables turnover | 4.64 | 4.70 | 8.04 | 7.60 | 8.86 |
| Working capital turnover | 3.54 | 3.39 | 2.51 | 3.42 | 7.96 |
The inventory turnover ratio for Intel Corporation has been relatively stable over the past five years, ranging from 3.41 to 5.03. This indicates that the company is efficient in managing its inventory levels and turning over inventory into sales. A higher inventory turnover ratio suggests better inventory management.
The receivables turnover ratio has shown an increasing trend, indicating that Intel is collecting its accounts receivable more quickly over the years. This is a positive sign as it reduces the risk of bad debts and improves the company's cash flow.
On the other hand, the payables turnover ratio has fluctuated over the same period, but generally remains at a moderate level. A lower payables turnover ratio may suggest that Intel is taking longer to pay its suppliers, while a higher ratio could indicate that the company is managing its payables efficiently.
The working capital turnover ratio has exhibited a downward trend, with a significant decrease from 2019 to 2021. This may imply that Intel is becoming less efficient in generating revenue from its working capital. A lower working capital turnover ratio could indicate inefficiencies in managing the company's current assets and liabilities.
Overall, the activity ratios suggest that Intel Corporation has been effective in managing its inventory and collecting receivables, but there may be room for improvement in managing payables and working capital to enhance operational efficiency.
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 | 101.93 | 107.03 | 85.10 | 72.56 | 87.28 |
| Days of sales outstanding (DSO) | days | 23.45 | 25.22 | 44.27 | 32.78 | 39.74 |
| Number of days of payables | days | 78.58 | 77.66 | 45.39 | 48.06 | 41.20 |
Analyzing the activity ratios of Intel Corporation over the past five years provides insight into its inventory management, accounts receivable collection, and accounts payable practices.
1. Days of Inventory on Hand (DOH): The DOH ratio reflects the number of days it takes for Intel to sell its inventory. Over the five-year period, there was an increase in the days of inventory on hand, peaking at 107.03 days in 2022 and then decreasing to 101.93 days in 2023. This indicates that Intel held inventory for a longer period in 2022 but managed to reduce it slightly by the end of 2023. The company might want to focus on improving inventory turnover to avoid tying up capital in excess inventory.
2. Days of Sales Outstanding (DSO): The DSO ratio measures how quickly Intel collects payments from its customers. The trend shows a decrease in DSO from 39.74 days in 2019 to 23.45 days in 2023, indicating a significant improvement in accounts receivable management. The decline in DSO suggests that Intel streamlined its credit and collection processes, which positively impacted cash flow and liquidity.
3. Number of Days of Payables: This ratio represents the number of days it takes for Intel to pay its suppliers. The data reveals an increasing trend in the number of days of payables over the period, reaching 78.58 days in 2023. This suggests that Intel is taking longer to pay its bills, possibly to manage working capital or improve cash flow. However, it is important for Intel to strike a balance in its payables management to maintain strong supplier relationships.
In conclusion, while Intel has shown progress in managing its accounts receivable, there is room for improvement in inventory turnover and payables management. The company should continue to monitor and optimize its working capital cycle to enhance efficiency and financial performance.
See also:
Intel Corporation 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 | 0.56 | 0.76 | 1.24 | 1.36 | 1.28 |
| Total asset turnover | 0.28 | 0.34 | 0.46 | 0.50 | 0.52 |
The long-term activity ratios for Intel Corporation exhibit a decreasing trend over the past five years.
The fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its fixed assets, has declined from 1.28 in 2019 to 0.56 in 2023. This indicates that Intel is generating fewer sales revenue from its fixed assets in recent years, which could be a sign of underutilization or inefficiency in managing its long-term assets.
Similarly, the total asset turnover ratio, which evaluates the company's ability to generate sales from all its assets, has also decreased from 0.52 in 2019 to 0.28 in 2023. This decline suggests that Intel is becoming less efficient in utilizing its total assets to generate sales revenue over time.
Overall, the declining trend in both fixed asset turnover and total asset turnover ratios indicates that Intel Corporation may be facing challenges in optimizing the productivity and efficiency of its long-term assets in generating sales revenue. It is essential for the company to assess and address these inefficiencies to improve its long-term operational performance and profitability.