Keysight Technologies Inc (KEYS)
Activity ratios
Short-term
Turnover ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.40 | 3.39 | 3.93 | 4.19 | 3.95 |
| Receivables turnover | 4.82 | 5.56 | 5.68 | 6.46 | 6.41 |
| Payables turnover | 11.09 | 11.68 | 9.69 | 11.34 | 13.35 |
| Working capital turnover | 1.76 | 1.98 | 1.92 | 1.96 | 1.84 |
Keysight Technologies Inc's activity ratios provide insights into how efficiently the company is managing its assets and liabilities.
1. Inventory turnover: The trend in inventory turnover shows a slight decline from 4.19 in 2021 to 3.40 in 2024. This indicates that Keysight is taking longer to sell its inventory, which could imply potential issues with inventory management or a shift in sales patterns.
2. Receivables turnover: The receivables turnover ratio has decreased from 6.46 in 2021 to 4.82 in 2024. A decreasing trend in receivables turnover suggests that the company is taking longer to collect payments from its customers, which may impact cash flow and liquidity.
3. Payables turnover: The payables turnover ratio has fluctuated over the years, with a decrease from 13.35 in 2020 to 11.09 in 2024. A higher payables turnover ratio indicates that Keysight is taking longer to pay its suppliers, which could potentially strain supplier relationships if not managed effectively.
4. Working capital turnover: The working capital turnover ratio has shown some variability but remained relatively stable over the years. The ratio measures how efficiently working capital is being used to generate sales, with a higher ratio indicating more effective utilization of resources.
Overall, the analysis of Keysight Technologies Inc's activity ratios suggests room for improvement in managing inventory levels, collecting receivables more promptly, and optimizing payables effectively to enhance operational efficiency and financial performance. Monitoring and addressing these trends can help the company achieve better working capital management and overall financial health.
Average number of days
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 107.50 | 107.61 | 92.90 | 87.13 | 92.38 |
| Days of sales outstanding (DSO) | days | 75.65 | 65.67 | 64.25 | 56.51 | 56.99 |
| Number of days of payables | days | 32.92 | 31.25 | 37.68 | 32.18 | 27.34 |
In analyzing Keysight Technologies Inc's activity ratios, we can observe the following trends:
1. Days of Inventory on Hand (DOH):
- The DOH has been relatively stable over the past five years, with a slight increase from 87.13 days in 2021 to 107.50 days in 2024.
- This indicates that on average, Keysight holds inventory for about 107.50 days before it is sold.
- A higher DOH may suggest slow-moving inventory or inefficiencies in inventory management.
2. Days of Sales Outstanding (DSO):
- The DSO has shown some fluctuations over the years, ranging from 56.51 days in 2021 to 75.65 days in 2024.
- This metric measures the average number of days it takes for Keysight to collect revenue from its customers.
- A higher DSO may indicate potential issues with credit policies or collection processes.
3. Number of Days of Payables:
- The number of days of payables has also varied over the years, with a peak of 37.68 days in 2022 and a decrease to 32.92 days in 2024.
- This ratio represents the average number of days it takes for Keysight to pay its suppliers.
- A longer period may suggest favorable credit terms with suppliers, while a significant decrease could signal potential liquidity issues.
Overall, analyzing these activity ratios provides insights into Keysight Technologies Inc's efficiency in managing inventory, collecting receivables, and paying suppliers. It is essential for the company to closely monitor these ratios to ensure optimal working capital management and operational effectiveness.
Long-term
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.43 | 7.18 | 7.86 | 7.60 | 7.09 |
| Total asset turnover | 0.54 | 0.63 | 0.67 | 0.64 | 0.58 |
To analyze Keysight Technologies Inc's long-term activity ratios, we will focus on the fixed asset turnover and total asset turnover ratios over the past five years.
1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company generates sales using its fixed assets.
- Keysight Technologies Inc's fixed asset turnover has fluctuated over the past five years, ranging from 6.43 to 7.86.
- A higher fixed asset turnover ratio indicates better utilization of fixed assets to generate revenue. The company's ratios have generally been above 6, suggesting effective management of its fixed assets.
- The slight fluctuations in the ratio may be due to changes in production capacity, technological advancements, or capital expenditures.
2. Total Asset Turnover:
- The total asset turnover ratio shows how efficiently a company utilizes its total assets to generate revenue.
- Keysight Technologies Inc's total asset turnover has increased steadily from 0.58 in 2020 to 0.54 in 2024.
- A higher total asset turnover ratio indicates that the company is generating more revenue per unit of assets invested. The increasing trend in this ratio suggests improved efficiency in asset utilization over the years.
- The company may have implemented strategies to optimize its asset base, streamline operations, or expand revenue-generating activities.
Overall, despite some fluctuations in the fixed asset turnover ratio, Keysight Technologies Inc has displayed a consistent improvement in its total asset turnover, indicating enhanced efficiency in utilizing both fixed and total assets to generate revenue. This trend reflects positive management of the company's asset base and operations over the past five years.