MaxLinear Inc (MXL)

Short-term

Turnover ratios

MaxLinear Inc's activity ratios provide insights into how efficiently the company is managing its assets and liabilities.

1. Inventory Turnover: The inventory turnover ratio measures how effectively the company is selling its inventory. MaxLinear's inventory turnover has shown a slight increase from 2.72 in 2020 to 3.01 in 2021, indicating that the company is selling its inventory more quickly. However, there was a dip in 2024 to 1.83, which may suggest potential issues with inventory management or slowing sales.

2. Receivables Turnover: This ratio reflects how well the company is collecting payments from its customers. MaxLinear's receivables turnover has been gradually decreasing from 7.10 in 2020 to 4.22 in 2024. A declining trend in receivables turnover may signal potential challenges in collecting payments or extending credit terms.

3. Payables Turnover: The payables turnover ratio shows how efficiently the company is managing its accounts payable. MaxLinear's payables turnover fluctuated over the years, with a significant spike in 2023 to 14.27, indicating that the company may be paying its suppliers more rapidly. However, the ratio dropped in 2024 to 5.28, suggesting a possible extension of payment terms.

4. Working Capital Turnover: This ratio measures how effectively the company is using its working capital to generate sales. MaxLinear's working capital turnover has fluctuated over the years, reaching its peak in 2022 at 5.05 and declining in 2024 to 2.55. A decreasing trend in working capital turnover may indicate inefficiencies in utilizing working capital or generating sales.

Overall, analysis of MaxLinear Inc's activity ratios suggests areas where the company may need to focus on improving efficiency, such as managing inventory levels, enhancing accounts receivable collections, optimizing payment terms with suppliers, and utilizing working capital more effectively to drive sales.

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Average number of days

MaxLinear Inc's activity ratios provide insight into how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH):
- The company's Days of Inventory on Hand decreased from 134.35 days in 2020 to 118.55 days in 2023 before rising to 198.95 days in 2024.
- A lower DOH indicates that the company is selling its inventory more quickly, which can be positive for cash flow and profitability. However, the increase in 2024 may raise concerns about overstocking or potential obsolescence.

2. Days of Sales Outstanding (DSO):
- The Days of Sales Outstanding decreased from 51.43 days in 2020 to 48.97 days in 2021, but then increased significantly to 89.83 days in 2023 before decreasing slightly to 86.52 days in 2024.
- A lower DSO indicates that the company is collecting receivables more quickly, improving cash flow. The significant increase in 2023 may point to potential credit or collection issues that need attention.

3. Number of Days of Payables:
- The Number of Days of Payables increased from 44.97 days in 2020 to 69.10 days in 2024, with fluctuations in between.
- A longer payment period may indicate that the company is using suppliers' funds effectively to finance operations. However, a substantial increase could signal strained supplier relationships or cash flow challenges in later years.

Overall, monitoring these activity ratios over time can help assess the company's operational efficiency, working capital management, and potential financial risks.

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Long-term

Based on the provided data, we can analyze the long-term activity ratios of MaxLinear Inc as follows:

1. Fixed Asset Turnover Ratio:
- The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue.
- MaxLinear Inc's fixed asset turnover ratio has shown fluctuating trends over the years: it increased from 12.13 in 2020 to 14.65 in 2021, dropped slightly to 14.18 in 2022, then decreased noticeably to 10.44 in 2023, and further declined to 6.08 in 2024.
- A higher fixed asset turnover ratio indicates better efficiency in asset utilization, while a decreasing ratio may suggest either overinvestment in fixed assets or a decline in revenue generated from these assets.
- The significant decrease in the fixed asset turnover ratio from 2023 to 2024 could raise concerns about the company's ability to generate revenue efficiently from its fixed assets.

2. Total Asset Turnover Ratio:
- The total asset turnover ratio reflects how efficiently a company is using its total assets to generate sales.
- MaxLinear Inc's total asset turnover ratio has also shown variability across the years: it increased from 0.47 in 2020 to 0.85 in 2021, further rose to 0.95 in 2022, then dropped to 0.64 in 2023, and significantly decreased to 0.42 in 2024.
- A higher total asset turnover ratio indicates efficient use of assets to generate revenue, while a declining ratio may suggest either inefficient asset utilization or a decrease in the company's sales generating capacity.
- The notable decrease in the total asset turnover ratio from 2023 to 2024 is a cause for concern as it indicates a reduction in revenue generation efficiency relative to the level of total assets employed.

In summary, based on the analysis of the fixed asset turnover and total asset turnover ratios, it appears that MaxLinear Inc's efficiency in utilizing both fixed assets and total assets to generate revenue has shown signs of decline in the most recent year, particularly highlighted by the sharp decrease in both ratios in 2024. Further investigation and analysis of the company's operational performance and asset management strategies may be warranted to address these concerning trends.