Intel Corporation (INTC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.07 | 3.58 | 3.41 | 4.29 | 5.03 |
| Receivables turnover | 8.81 | 15.57 | 14.47 | 8.25 | 11.14 |
| Payables turnover | 3.96 | 4.64 | 4.70 | 8.04 | 7.60 |
| Working capital turnover | 4.59 | 3.54 | 3.39 | 2.51 | 3.42 |
The analysis of Intel Corporation's activity ratios reveals important insights into its operational efficiency and effectiveness in managing its assets and liabilities.
1. Inventory Turnover:
- Intel's inventory turnover decreased from 5.03 in December 2020 to 3.41 in December 2022, indicating a decline in the rate at which the company sells its inventory.
- The ratio increased to 4.07 by December 2024, showing a slight improvement but still below the 2020 level.
- A lower inventory turnover ratio may suggest overstocking or slow-moving inventory, which could tie up capital and lead to potential obsolescence risks.
2. Receivables Turnover:
- Intel's receivables turnover decreased from 11.14 in December 2020 to 8.25 in December 2021, indicating a slower collection of receivables.
- The ratio improved significantly to 15.57 by December 2023, showing a strong ability to collect outstanding receivables efficiently.
- However, the ratio declined to 8.81 by December 2024, suggesting a potential deterioration in the company's receivables management.
3. Payables Turnover:
- Intel's payables turnover decreased from 7.60 in December 2020 to 3.96 in December 2024, indicating a decrease in the rate at which the company pays its suppliers.
- A lower payables turnover ratio may signal potential liquidity issues or strained supplier relationships if the company is delaying payments excessively.
4. Working Capital Turnover:
- Intel's working capital turnover fluctuated over the years, ranging from 2.51 in December 2021 to 4.59 in December 2024.
- A higher working capital turnover ratio suggests that Intel is efficiently utilizing its working capital to generate sales, improving overall operational efficiency.
In conclusion, Intel Corporation's activity ratios highlight trends in inventory management, receivables collection, payables payment, and working capital utilization. The company should focus on optimizing inventory levels, enhancing receivables management, and maintaining healthy supplier relationships to improve operational efficiency and financial performance.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 89.65 | 101.93 | 107.03 | 85.10 | 72.56 |
| Days of sales outstanding (DSO) | days | 41.42 | 23.45 | 25.22 | 44.27 | 32.78 |
| Number of days of payables | days | 92.28 | 78.58 | 77.66 | 45.39 | 48.06 |
Intel Corporation's activity ratios provide insights into how efficiently the company manages its inventories, collects receivables, and pays its suppliers.
1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, Intel holds its inventory before selling it.
- Intel's DOH increased from 72.56 days in 2020 to 101.93 days in 2023 before decreasing slightly to 89.65 days in 2024.
- The rising trend from 2020 to 2023 could indicate potential issues such as slow-moving inventory or overstocking.
- In 2024, the decrease in DOH suggests improved inventory management efficiency compared to the prior year.
2. Days of Sales Outstanding (DSO):
- The DSO represents the average number of days it takes for Intel to collect its accounts receivable.
- Intel's DSO fluctuated over the years, ranging from 23.45 days in 2023 to 44.27 days in 2021.
- A lower DSO indicates faster collections, improving cash flow and liquidity for the company.
- Intel's DSO improved significantly in 2023, reflecting better receivables management compared to the previous years.
3. Number of Days of Payables:
- This ratio shows how long Intel takes to pay its suppliers.
- Intel's number of days of payables increased from 48.06 days in 2020 to 92.28 days in 2024.
- A longer payment period may indicate a strategy to preserve cash or negotiate better terms with suppliers.
- The increase in days of payables over the years may also suggest potential concerns about supplier relationships or liquidity management.
Overall, analyzing Intel Corporation's activity ratios reveals important trends in managing inventory, receivables, and payables, which can impact the company's operational efficiency and financial performance. Monitoring these ratios over time is crucial for assessing Intel's working capital management and overall business health.
See also:
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 0.50 | 0.56 | 0.76 | 1.24 | 1.36 |
| Total asset turnover | 0.27 | 0.28 | 0.34 | 0.46 | 0.50 |
The fixed asset turnover ratio for Intel Corporation has shown a decreasing trend over the years, indicating a decline in the company's efficiency in generating sales from its fixed assets. This trend may raise concerns about the company's asset management and utilization.
Similarly, the total asset turnover ratio has also decreased steadily over the years, reflecting a decline in Intel's ability to generate sales in relation to its total assets. This downward trend suggests that the company may be facing challenges in efficiently utilizing its assets to drive revenue growth.
Overall, the declining long-term activity ratios for Intel Corporation signal potential inefficiencies in asset utilization and management, which may require further investigation and strategic adjustments to improve the company's operational performance.