Littelfuse Inc (LFUS)

Short-term

Turnover ratios

The analysis of Littelfuse Inc's activity ratios provides insights into the efficiency of the company's operations.

1. Inventory Turnover: The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a period. Littelfuse Inc's inventory turnover has shown a slight decline from 3.66 in 2020 to 3.37 in 2024. A decreasing trend in this ratio may indicate either overstocking or slow-moving inventory, which could tie up capital and affect profitability.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently a company collects its accounts receivable. In this case, the data shows that receivables turnover is not available for the years 2020-2024. This missing data may suggest that the company does not provide information on the frequency of its accounts receivable turnover.

3. Payables Turnover: The payables turnover ratio reflects how efficiently a company pays its suppliers. Similarly, the data for Littelfuse Inc indicates that payables turnover information is not available for the years 2020-2024. This missing data makes it challenging to assess the company's efficiency in managing its payables.

4. Working Capital Turnover: The working capital turnover ratio measures how effectively a company utilizes its working capital to generate revenue. Littelfuse Inc's working capital turnover has fluctuated from 1.54 in 2020 to 1.96 in 2024. An increase in this ratio indicates that the company is generating more revenue per unit of working capital, which could signify improved operational efficiency over time.

In summary, Littelfuse Inc's activity ratios suggest some fluctuations in the efficiency of its operations over the years. The company may need to focus on optimizing its inventory management, enhancing accounts receivable and payables turnover, and maintaining a balance between working capital efficiency and revenue generation to ensure sustained growth and profitability.

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Average number of days

Littelfuse Inc's activity ratios provide insight into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH): The trend of Littelfuse Inc's DOH over the five years indicates an increasing average time the company takes to sell its inventory: from 99.70 days in 2020 to 108.28 days in 2024. A higher DOH may suggest potential issues such as slow-moving inventory or overstocking, which can tie up working capital and increase holding costs.

2. Days of Sales Outstanding (DSO): There is a lack of data for DSO, indicating that information on how long it takes for Littelfuse to collect payments from customers is not available. Ideally, a lower DSO would imply that the company is efficient in collecting revenue and managing its accounts receivable, thus improving cash flow.

3. Number of Days of Payables: Similarly, data on the number of days of payables is not provided, making it impossible to assess how long Littelfuse takes to pay its suppliers. A longer period of payables could indicate favorable credit terms with suppliers, potentially benefiting cash flow management.

In conclusion, while the data on DSO and payables is missing, the trend in DOH shows an increase in the number of days it takes for Littelfuse Inc to sell its inventory which could be a point of concern for the company's efficiency in managing its working capital and inventory levels.

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Long-term

The fixed asset turnover ratio for Littelfuse Inc has shown a positive trend over the past few years, increasing from 4.20 in 2020 to 5.23 in 2022. This indicates that the company is generating more sales relative to its investment in fixed assets, which is a positive sign of efficiency in utilizing these assets to generate revenue.

On the other hand, the total asset turnover ratio, although showing some variation, has generally decreased slightly from 0.53 in 2020 to 0.56 in 2024. This suggests that the company's ability to generate sales from its total assets has decreased over this period, which may indicate inefficiencies in managing and utilizing its total asset base.

Overall, while the fixed asset turnover ratio reflects improving asset efficiency, the declining trend in the total asset turnover ratio raises some concerns about the company's overall asset utilization efficiency. Further analysis and comparison with industry peers would be beneficial to gain a deeper understanding of Littelfuse Inc's long-term activity performance.