Micron Technology Inc (MU)

Short-term

Turnover ratios

Inventory Turnover:
- The inventory turnover ratio measures how efficiently Micron Technology Inc manages its inventory by determining how many times the company sells and replaces its inventory during a period.
- Over the observed period, the inventory turnover ratio fluctuated between 2.02 and 2.73 times, indicating some variability in inventory management efficiency.
- A higher inventory turnover ratio generally suggests that inventory is selling quickly, while a lower ratio may indicate overstocking or slower sales.

Receivables Turnover:
- The receivables turnover ratio assesses how effectively Micron collects outstanding customer payments.
- The company had values of 5.95 and 3.80 for receivables turnover, suggesting that it collected receivables 5.95 and 3.80 times respectively during the observed periods.
- A higher receivables turnover ratio usually indicates efficient collection practices, while a lower ratio may suggest issues with collecting outstanding payments promptly.

Payables Turnover:
- The payables turnover ratio evaluates how quickly Micron settles its payables with suppliers.
- With values ranging between 6.87 and 6.92, the company maintained a relatively consistent payables turnover ratio across the observed periods.
- A higher payables turnover ratio generally signifies faster payment to suppliers, while a lower ratio may indicate longer credit terms or delayed payments.

Working Capital Turnover:
- The working capital turnover ratio measures how effectively Micron utilizes its working capital to generate revenue.
- The company had values between 0.94 and 2.16, suggesting variations in how efficiently working capital was utilized during the different periods.
- A higher working capital turnover ratio usually signifies efficient use of resources to drive sales, while a lower ratio may indicate underutilization of working capital or inefficiencies in revenue generation.

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Average number of days

Based on the provided data for Micron Technology Inc, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- As of August 31, 2022, Micron held inventory for an average of 144.25 days, which decreased to 133.94 days by September 1, 2022.
- The DOH increased significantly to 180.54 days by August 31, 2023, indicating a longer time taken to sell inventory.
- There was a slight improvement with the DOH decreasing to 155.10 days by August 29, 2024, however, it rose again to 166.14 days by August 31, 2024.
- Overall, the trend shows some fluctuations in the days of inventory held, suggesting potential challenges in managing and optimizing inventory turnover efficiency.

2. Days of Sales Outstanding (DSO):
- Data for August 31, 2022, and August 31, 2023, show "N/A" for DSO, which may indicate missing data or a different reporting structure.
- On September 1, 2022, the DSO was reported as 61.34 days, indicating the average number of days it takes for Micron to collect payments from customers.
- The DSO increased to 95.93 days by August 29, 2024, suggesting a longer collection period.
- The absence of data for DSO in 2023 and 2024 complicates a comprehensive trend analysis, but the available data points to a potential challenge in efficient accounts receivable management.

3. Number of Days of Payables:
- Similar to DSO, data for August 31, 2022, and August 31, 2023, indicate "N/A" for the number of days of payables, suggesting incomplete information or a reporting variation.
- On September 1, 2022, Micron had payables outstanding for an average of 52.73 days, indicating the average credit period the company receives from its suppliers.
- By August 29, 2024, the days of payables remained relatively stable at 53.11 days.
- The absence of data for certain periods limits the ability to conduct a thorough analysis of the trend in payable days, but the available points suggest a consistent credit term with suppliers.

In summary, the activity ratios of Micron Technology Inc show fluctuations in inventory turnover and collection periods, albeit with missing data points that limit a comprehensive trend analysis. Managing inventory efficiently and optimizing accounts receivable collection could be areas of focus for the company to improve its operational performance.

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See also:

Micron Technology Inc Short-term (Operating) Activity Ratios

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Long-term

Long-term activity ratios provide insights into how efficiently a company is utilizing its assets to generate sales revenue. Let's analyze the data for Micron Technology Inc based on the provided information.

1. Fixed Asset Turnover:
- Fixed asset turnover ratio measures how effectively a company generates sales revenue from its fixed assets.
- In August 2022, the fixed asset turnover ratio was 0.78, indicating that for every dollar invested in fixed assets, Micron generated $0.78 in sales.
- The ratio slightly improved to 0.81 in September 2022, suggesting a slightly better utilization of fixed assets.
- However, the ratio dropped significantly to 0.40 in August 2023, signaling a decline in the efficiency of utilizing fixed assets to generate revenue.
- There was a recovery in August 2024, with the ratio increasing to 0.67, reflecting an improvement in utilizing fixed assets to generate sales.

2. Total Asset Turnover:
- Total asset turnover ratio shows how efficiently a company generates sales revenue from all its assets.
- In August 2022 and September 2022, the total asset turnover ratio remained constant at 0.46, indicating that Micron generated $0.46 in sales for every dollar of total assets invested.
- The ratio decreased to 0.24 in August 2023, suggesting a lower efficiency in generating revenue from all assets.
- By August 2024, there was a slight improvement as the ratio increased to 0.36, indicating a better utilization of total assets to generate sales revenue.

Overall, the analysis of long-term activity ratios for Micron Technology Inc shows fluctuations in the efficiency of utilizing fixed assets and total assets to generate sales revenue over the period under observation. It is essential for the company to consistently monitor and improve these ratios to ensure optimal asset utilization and sustainable revenue generation.

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See also:

Micron Technology Inc Long-term (Investment) Activity Ratios