Micron Technology Inc (MU)

Activity ratios

Short-term

Turnover ratios

	Aug 29, 2024	Aug 31, 2023	Sep 1, 2022	Sep 2, 2021	Sep 3, 2020
Inventory turnover	2.35	2.17	2.73	4.19	2.99
Receivables turnover	3.80	6.22	5.95	5.19	5.44
Payables turnover	6.87	8.66	6.92	9.00	6.81
Working capital turnover	1.66	0.92	2.14	2.04	1.88

Inventory turnover ratio measures how efficiently a company manages its inventory. In the case of Micron Technology Inc, the trend in the inventory turnover ratio has been fluctuating over the past five years, ranging from 2.17 to 4.19. The decrease in 2023 followed by an increase in 2024 indicates that the company was able to sell through its inventory more effectively in the recent year compared to the previous year.

Receivables turnover ratio reflects how quickly a company collects outstanding receivables. Micron Technology Inc has experienced a declining trend in receivables turnover ratio over the past five years, dropping from 6.22 to 3.80. A lower turnover ratio may suggest a longer collection period for receivables, which could potentially impact the company's cash flow.

Payables turnover ratio measures how efficiently a company pays its suppliers. Micron Technology Inc has shown a fluctuating trend in payables turnover ratio, varying from 6.81 to 9.00. A higher turnover ratio indicates that the company is paying its trade payables more frequently, which could be a positive sign for supplier relationships and cash management.

Working capital turnover ratio evaluates how effectively a company utilizes its working capital to generate sales revenue. Micron Technology Inc has demonstrated an inconsistent trend in working capital turnover ratio over the past five years, ranging from 0.92 to 2.14. A higher turnover ratio suggests that the company is efficiently using its working capital to generate sales, while a lower ratio may indicate inefficiencies in working capital management.

Overall, analyzing these activity ratios provides insights into how efficiently Micron Technology Inc is managing its inventory, receivables, payables, and working capital to drive its operational performance and financial health.

Average number of days

		Aug 29, 2024	Aug 31, 2023	Sep 1, 2022	Sep 2, 2021	Sep 3, 2020
Days of inventory on hand (DOH)	days	155.10	167.85	133.94	87.05	122.25
Days of sales outstanding (DSO)	days	95.93	58.64	61.34	70.38	67.09
Number of days of payables	days	53.11	42.13	52.73	40.54	53.63

Looking at the activity ratios for Micron Technology Inc over the past five years, we observe the following trends:

1. Days of Inventory on Hand (DOH): The trend in DOH shows fluctuations over the years, with a high of 167.85 days in 2023 and a low of 87.05 days in 2021. This ratio indicates the number of days it takes for the company to sell its inventory, with a higher number suggesting slower inventory turnover. The decrease in DOH from 2023 to 2024 indicates an improvement in inventory management efficiency.

2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO is generally favorable as it indicates quick collection of receivables. Micron's DSO has fluctuated over the years, with the highest figure of 95.93 days in 2024 and the lowest of 58.64 days in 2023. The increase in DSO from 2023 to 2024 suggests a potential slowdown in the collection of receivables.

3. Number of Days of Payables: This ratio indicates how long a company takes to pay its suppliers. A longer period suggests favorable payment terms for the company. Micron's number of days of payables has shown some variation over the years, with a high of 53.63 days in 2020 and a low of 40.54 days in 2021. The increase in this ratio from 2021 to 2024 could indicate a lengthening of payment terms with suppliers.

Overall, the analysis of these activity ratios provides insights into Micron Technology Inc's management of inventory, collection of receivables, and payment to suppliers over the past five years. The company has experienced fluctuations in these ratios, indicating changes in operational efficiency and working capital management.

Long-term

	Aug 29, 2024	Aug 31, 2023	Sep 1, 2022	Sep 2, 2021	Sep 3, 2020
Fixed asset turnover	0.67	0.42	0.81	0.85	0.70
Total asset turnover	0.36	0.24	0.46	0.47	0.40

Long-term activity ratios provide insight into how efficiently a company utilizes its assets to generate sales. When analyzing Micron Technology Inc's long-term activity ratios over the past five years, we can observe the following trends:

1. Fixed Asset Turnover:
- Micron's fixed asset turnover has fluctuated over the five-year period, ranging from 0.42 to 0.85.
- The ratio indicates that for every dollar invested in fixed assets, Micron generated between 0.42 to 0.85 dollars in revenue.
- The decreasing trend from 0.85 in 2022 to 0.67 in 2024 may suggest a decline in the efficiency of utilizing fixed assets to generate sales during the most recent period.

2. Total Asset Turnover:
- Micron's total asset turnover has also varied over the five-year period, ranging from 0.24 to 0.47.
- The ratio indicates that for every dollar invested in total assets, Micron generated between 0.24 to 0.47 dollars in revenue.
- Similar to the fixed asset turnover, the total asset turnover ratio shows some fluctuations over the years, with a moderate increase from 0.40 in 2020 to 0.36 in 2024.

Overall, the analysis of Micron Technology Inc's long-term activity ratios suggests that the company may have experienced fluctuations in its efficiency in utilizing both fixed and total assets to generate sales over the past five years. Further investigation into the factors influencing these ratios over time could provide valuable insights into the company's operational performance and strategic direction.