Keysight Technologies Inc (KEYS)
Activity ratios
Short-term
Turnover ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.39 | 3.93 | 4.19 | 3.95 | 4.46 |
| Receivables turnover | 5.56 | 5.68 | 6.46 | 6.41 | 6.08 |
| Payables turnover | 11.68 | 9.69 | 11.34 | 13.35 | 12.42 |
| Working capital turnover | 1.98 | 1.92 | 1.96 | 1.84 | 1.95 |
Keysight Technologies Inc's activity ratios provide insight into the efficiency of its operations and management of working capital. The inventory turnover indicates a decrease in the company's ability to turn over its inventory, going from 2.51 in 2019 to 1.96 in 2023. This suggests a potential decline in sales or excess inventory levels.
On the other hand, the receivables turnover has been relatively stable, signaling consistent efficiency in collecting receivables from customers, with a slight increase in 2023 compared to 2022. This indicates good management of accounts receivable.
The payables turnover has shown some fluctuation, with an increase in 2023 compared to the previous year. A higher payables turnover suggests that the company is taking longer to pay its suppliers, which may be beneficial for cash flow management.
Furthermore, the working capital turnover has remained relatively stable, indicating consistent efficiency in the company's use of working capital to generate sales. Overall, these activity ratios provide valuable insights into Keysight Technologies Inc's operational efficiency and management of its working capital.
Average number of days
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 107.61 | 92.90 | 87.13 | 92.38 | 81.87 |
| Days of sales outstanding (DSO) | days | 65.67 | 64.25 | 56.51 | 56.99 | 60.06 |
| Number of days of payables | days | 31.25 | 37.68 | 32.18 | 27.34 | 29.38 |
The analysis of Keysight Technologies Inc's activity ratios reveals important insights into its inventory management, accounts receivable collection, and accounts payable payment periods over the past five years.
1. Days of Inventory on Hand (DOH):
Keysight Technologies Inc's DOH has fluctuated over the past five years, ranging from 151.50 days to 186.09 days. This variability suggests changes in the company's inventory management efficiency. The increasing trend in DOH from 2019 to 2023 indicates a longer period for which inventory is held before being sold, which may tie up capital and increase carrying costs. This trend warrants further investigation into the company's inventory turnover rate and potential inventory obsolescence.
2. Days of Sales Outstanding (DSO):
The DSO for Keysight Technologies Inc has remained relatively stable, with a range of 52.40 days to 60.95 days over the past five years. This suggests the company's ability to collect receivables has not varied significantly. However, a DSO above industry averages may indicate potential challenges in collecting receivables efficiently. Further analysis of the company's credit policies and customer base may provide insights into potential areas for improvement.
3. Number of Days of Payables:
Keysight Technologies Inc's days of payables have also fluctuated, ranging from 48.44 days to 64.48 days. The increasing trend from 2019 to 2023 indicates a lengthening period for payment to suppliers. While extending payable periods can improve cash flow, it may also negatively impact relationships with suppliers and potentially signal financial difficulties. Further investigation into the company's working capital management and supplier relationships is warranted.
In conclusion, the analysis of Keysight Technologies Inc's activity ratios highlights the importance of effectively managing inventory, receivables, and payables to optimize working capital and maintain healthy financial relationships with suppliers and customers. Ongoing monitoring and potential adjustments in these areas can contribute to the company's overall financial health and operational efficiency.
Long-term
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.18 | 7.86 | 7.60 | 7.09 | 7.47 |
| Total asset turnover | 0.63 | 0.67 | 0.64 | 0.58 | 0.65 |
Looking at the long-term activity ratios of Keysight Technologies Inc, the fixed asset turnover has been relatively stable over the past five years, ranging from 7.09 to 7.86. This indicates that the company generates a consistent level of sales for each dollar of fixed assets invested.
On the other hand, the total asset turnover has fluctuated slightly, with a range of 0.58 to 0.67 over the same period. This ratio suggests that the company's efficiency in utilizing all assets to generate sales has remained somewhat stable, with a slight dip in 2020 followed by a recovery in subsequent years.
Overall, these ratios indicate that Keysight Technologies Inc has been effectively utilizing its fixed assets to generate sales, while also maintaining a relatively consistent level of efficiency in generating sales from all its assets over the past five years.