Lam Research Corp (LRCX)

Activity ratios

Short-term

Turnover ratios

	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Inventory turnover	2.12	2.00	2.01	2.07	2.22	2.35	2.38	2.49	2.63	2.91	3.24	3.32	3.29	3.17	3.11	3.19	3.31	3.60	4.00	4.11
Receivables turnover	5.91	6.38	5.22	5.56	6.10	5.72	4.63	3.90	3.95	4.47	4.80	4.58	4.76	4.65	4.04	4.69	4.70	4.31	4.62	5.72
Payables turnover	14.56	16.28	17.81	18.56	22.71	19.06	12.49	9.45	10.33	10.07	10.44	11.38	10.65	10.62	10.12	10.29	10.62	12.10	13.49	14.66
Working capital turnover	1.74	1.74	1.61	1.79	1.91	2.01	2.06	2.08	2.21	2.15	1.98	2.01	1.77	1.69	1.49	1.38	1.28	1.29	1.59	1.47

Lam Research Corp's inventory turnover has shown slight fluctuations over the periods provided, ranging from 2.00 to 4.11 times. This indicates that the company is managing its inventory efficiently, with higher turnover ratios generally being more favorable as they suggest strong sales relative to the amount of inventory held.

The receivables turnover ratio, varying between 3.90 and 6.38, demonstrates how well Lam Research Corp is collecting outstanding receivables. A higher turnover ratio suggests that the company is effective in collecting payments from its customers in a timely manner.

The payables turnover ratio for Lam Research Corp has fluctuated between 9.45 and 22.71, indicating the speed at which the company pays its suppliers. A higher ratio implies that the company is taking longer to pay its payables, which could be advantageous in terms of managing cash flow efficiently.

The working capital turnover ratio, ranging from 1.28 to 2.21, reveals how effectively Lam Research Corp is utilizing its working capital to generate sales. A higher ratio indicates that the company is efficiently using its funds to support its operations and generate revenue.

Overall, the activity ratios suggest that Lam Research Corp is managing its inventory, receivables, payables, and working capital effectively. However, fluctuations in these ratios over time may require further analysis to identify any underlying trends or areas for improvement.

Average number of days

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Days of inventory on hand (DOH)	days	172.17	182.35	181.67	176.74	164.46	155.35	153.24	146.85	138.55	125.22	112.78	109.96	111.07	115.28	117.29	114.48	110.27	101.30	91.36	88.84
Days of sales outstanding (DSO)	days	61.71	57.23	69.94	65.61	59.79	63.81	78.78	93.62	92.39	81.67	76.07	79.76	76.66	78.50	90.27	77.86	77.60	84.76	78.99	63.85
Number of days of payables	days	25.06	22.43	20.49	19.66	16.07	19.15	29.23	38.61	35.32	36.24	34.95	32.07	34.27	34.37	36.08	35.48	34.38	30.17	27.06	24.90

Lam Research Corp's activity ratios, including Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into the efficiency of the company's operations and management of its working capital.

1. Days of Inventory on Hand (DOH):
- The trend in DOH shows an increasing number of days required to sell its inventory over the recent quarters.
- This could indicate potential issues such as overstocking, slowing sales, or inefficiencies in inventory management.
- The gradual increase in DOH may lead to higher carrying costs and potential obsolescence risk.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for Lam Research to collect payment after making a sale.
- The decreasing trend in DSO is favorable as it signifies faster collection of receivables.
- Lower DSO indicates efficient credit policies and effective management of accounts receivable.

3. Number of Days of Payables:
- The trend in the number of days of payables shows a fluctuating but generally stable pattern.
- A higher number of days of payables may indicate favorable payment terms negotiated with suppliers.
- However, a significant increase in the number of days of payables may signal potential liquidity issues or strained supplier relationships.

In conclusion, Lam Research Corp should focus on optimizing its inventory management to reduce DOH, continue to improve its collection efforts to lower DSO, and maintain a balanced approach to managing payables to ensure efficient working capital management.

Long-term

	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Fixed asset turnover	7.00	6.44	6.58	7.41	9.56	10.06	10.12	10.37	10.61	10.59	10.86	11.33	11.44	10.21	9.71	9.59	9.37	7.83	8.17	9.08
Total asset turnover	0.79	0.77	0.75	0.84	0.92	0.97	0.98	0.95	0.99	1.00	0.98	1.00	0.91	0.85	0.76	0.72	0.68	0.73	0.79	0.76

Based on the data provided, we can see that Lam Research Corp's fixed asset turnover ratio has been relatively stable over the periods, ranging from 6.44 to 11.44. The fixed asset turnover ratio measures how efficiently the company is utilizing its fixed assets to generate sales. A higher fixed asset turnover ratio typically indicates better efficiency in utilizing fixed assets.

On the other hand, Lam Research Corp's total asset turnover ratio has fluctuated more widely, ranging from 0.68 to 1.00. The total asset turnover ratio indicates the company's ability to generate sales from its total assets. A higher total asset turnover ratio signifies that the company is generating more sales for each dollar of assets it owns.

Overall, it appears that Lam Research Corp has been effectively using its fixed assets to generate sales, as indicated by the relatively high fixed asset turnover ratios. However, the fluctuating total asset turnover ratios suggest variations in the efficiency of the company in generating sales from its total assets. Further analysis and comparison with industry benchmarks may provide a deeper understanding of Lam Research Corp's long-term activity performance.