MACOM Technology Solutions Holdings Inc (MTSI)

Short-term

Turnover ratios

MACOM Technology Solutions Holdings Inc's activity ratios provide insight into the efficiency of its operations and management of resources.

1. Inventory turnover: The company's inventory turnover ratio has shown slight fluctuations over the periods, ranging from 1.59 to 3.23. The decreasing trend from 3.23 in Sep 30, 2021, to 1.73 in Sep 30, 2024, indicates a decrease in the efficiency of inventory management, possibly leading to excess inventory or slow-moving stock.

2. Receivables turnover: MACOM's receivables turnover ratio has also varied, ranging from 5.30 to 11.55. The company appears to be collecting its accounts receivable more efficiently, with an increasing trend noted until Dec 31, 2021, followed by some missing data, and a high value of 11.55 in Sep 30, 2020.

3. Payables turnover: The payables turnover ratio fluctuated between 6.19 and 11.28, suggesting varying payment terms with suppliers. There is no clear trend in the payables turnover ratio, indicating inconsistent management of payables over the periods.

4. Working capital turnover: The working capital turnover ratio fluctuated between 0.92 and 1.70. A higher turnover ratio indicates that the company is effectively utilizing its working capital to generate sales revenue. The company's working capital turnover has shown some volatility, which may reflect changes in business operations or seasonal fluctuations.

Overall, MACOM Technology Solutions Holdings Inc's activity ratios provide a mixed picture of its operational efficiency, with inventory and payables turnover ratios showing some challenges, while receivables and working capital turnover ratios displaying better performance.

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Average number of days

The activity ratios of MACOM Technology Solutions Holdings Inc show fluctuations in their operational efficiency over the periods analyzed.

1. Days of Inventory on Hand (DOH): This ratio indicates the number of days it takes for the company to sell its inventory. A higher number of days implies slower inventory turnover. MACOM's DOH has been gradually increasing from 146.72 days in Dec 2019 to 211.40 days in Sep 2024, suggesting a lengthening time to sell inventory which could lead to increased carrying costs.

2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect payment after making a sale. A higher DSO indicates slower collection. MACOM's DSO has been volatile, fluctuating from 31.60 days in Dec 2020 to 68.86 days in Mar 2024. This inconsistency may point to challenges in managing accounts receivable efficiently.

3. Number of Days of Payables: This ratio represents the number of days it takes for the company to pay its suppliers. A longer payable period can indicate better cash flow management but may also strain supplier relationships. MACOM's payables days have varied, reaching a peak of 58.99 days in Jun 2022 and declining to 46.96 days in Sep 2024. This suggests changes in the company's payment policies and relationships with suppliers.

In conclusion, MACOM Technology Solutions Holdings Inc's activity ratios reflect fluctuations in inventory management, accounts receivable collection, and payment practices over the periods analyzed. Continued monitoring and potential adjustments in operational processes may be necessary to enhance efficiency and optimize working capital management.

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Long-term

MACOM Technology Solutions Holdings Inc's long-term activity ratios provide insights into the efficiency with which the company utilizes its assets.

The fixed asset turnover ratio measures how effectively the company generates revenue from its fixed assets. Over the latest period, MACOM's fixed asset turnover ranged from 3.39 to 5.85, indicating that the company generated between $3.39 to $5.85 in revenue for every dollar invested in fixed assets. The trend shows some variability but generally maintains a healthy level, suggesting efficient utilization of fixed assets.

Total asset turnover reflects the company's overall efficiency in generating sales from its total assets. The total asset turnover ratio ranged from 0.38 to 0.55 in the latest period, indicating that MACOM generated between $0.38 to $0.55 in revenue for every dollar of total assets owned. Despite some fluctuations, the ratios suggest that the company has been effectively utilizing its total assets to generate revenue.

Overall, MACOM Technology Solutions Holdings Inc's long-term activity ratios demonstrate a generally efficient use of both fixed and total assets to drive revenue generation. The company's ability to maintain stable or improving turnover ratios indicates effective asset management and operational performance.