Kulicke and Soffa Industries Inc (KLIC)

Short-term

Turnover ratios

Kulicke and Soffa Industries Inc's activity ratios provide insights into the efficiency with which the company manages its working capital components. The inventory turnover ratio indicates that the company has been able to sell its inventory about 2 to 5 times a year over the past five years, with a noticeable decrease in 2023. This could imply potential issues with managing inventory levels or demand fluctuations during that year.

The receivables turnover ratio shows the company's ability to collect its accounts receivable, with values ranging from 3.14 to 4.86. The decrease in 2021 followed by an increase in the subsequent years suggests some variability in the company's collection efficiency, which could be attributed to changes in credit policies or customer payment behaviors.

Kulicke and Soffa Industries Inc's payables turnover ratio has generally been in the range of 5 to 11 over the past five years. A higher payables turnover ratio may indicate that the company is taking longer to pay its suppliers, potentially using the funds to support other operational activities. The significant decrease in 2021 followed by an increase in subsequent years may reflect changes in the company's payment terms or purchasing strategies.

The working capital turnover ratio indicates the efficiency of converting working capital into revenue, with values ranging from 0.74 to 1.52. The fluctuations in this ratio over the years suggest varying levels of efficiency in utilizing working capital to generate sales, which could be influenced by changes in operational strategies or market conditions.

Overall, analyzing Kulicke and Soffa Industries Inc's activity ratios provides valuable insights into the company's operational efficiency and financial performance in managing its inventory, receivables, payables, and working capital to drive revenue generation.

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Average number of days

Analyzing Kulicke and Soffa Industries Inc's activity ratios over the past five years, we observe the following trends:

1. Days of Inventory on Hand (DOH):
- The DOH ratio measures how many days it takes for the company to sell its inventory.
- Kulicke and Soffa's DOH has been fluctuating significantly over the years, with a notable increase in 2023 and a decrease in 2024 compared to the previous years.
- In 2024, the company had inventory on hand for approximately 148.29 days, indicating a slower rate of inventory turnover compared to previous years.
- Kulicke and Soffa may need to assess and optimize its inventory management practices to reduce excess inventory levels and improve efficiency.

2. Days of Sales Outstanding (DSO):
- The DSO ratio measures how many days it takes for the company to collect its accounts receivable.
- Kulicke and Soffa's DSO has also been fluctuating but with a generally decreasing trend over the past five years.
- In 2024, the company took approximately 100.22 days to collect its sales, which is higher compared to 2023 but lower than the levels seen in 2020 and 2021.
- The decreasing trend in DSO may indicate improvements in the company's credit policies and collection efforts.

3. Number of Days of Payables:
- This ratio reflects how many days it takes for the company to pay its suppliers.
- Kulicke and Soffa's number of days of payables has been relatively stable over the years.
- In 2024, the company took around 49.10 days to pay its payables, showing a slight increase compared to the preceding years.
- Maintaining a stable payment period to suppliers is crucial for managing cash flow effectively and maintaining strong supplier relationships.

In conclusion, while Kulicke and Soffa Industries Inc has shown some fluctuations in its activity ratios over the years, the company may need to focus on optimizing its inventory turnover, collections management, and payment practices to improve operational efficiency and financial performance.

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Long-term

The fixed asset turnover ratio for Kulicke and Soffa Industries Inc has fluctuated over the past five years, with a significant decrease from 2021 to 2022, followed by a sharp increase in 2023 and a slight decrease in 2024. This ratio indicates the company's efficiency in generating sales revenue from its investment in fixed assets. A higher ratio is generally preferred as it suggests that the company is utilizing its fixed assets more effectively to generate sales.

On the other hand, the total asset turnover ratio has also varied during the same period, with a notable decrease in 2020 followed by relatively stable levels in the subsequent years. This ratio reflects the company's ability to generate sales in relation to its total assets. A higher total asset turnover ratio signifies that the company is efficiently utilizing its total assets to generate revenue.

Overall, the trend in both ratios suggests that there have been fluctuations in the company's efficiency in generating sales revenue from its fixed assets and total assets over the past five years. Further analysis and comparison with industry benchmarks may provide additional insights into the company's operational performance and efficiency.