NetApp Inc (NTAP)

Short-term

Turnover ratios

NetApp Inc's activity ratios provide insight into the company's operational efficiency and management of its working capital.

1. Inventory turnover: NetApp Inc's inventory turnover has shown some fluctuations over the past five years. The ratio measures the number of times a company sells and replaces its inventory during a period. A higher inventory turnover indicates that NetApp is efficiently managing its inventory levels and turning over its stock more frequently, which could lead to lower carrying costs and potentially higher profitability.

2. Receivables turnover: The receivables turnover ratio has been relatively consistent over the years, indicating that NetApp is efficient in collecting payments from customers. A higher receivables turnover ratio suggests that the company is effectively managing its accounts receivable and converting credit sales into cash quickly.

3. Payables turnover: The payables turnover ratio has also fluctuated but has generally remained stable. This ratio reflects how efficiently NetApp pays its suppliers and creditors. A higher payables turnover ratio implies that the company is paying its bills promptly, which can help maintain good relationships with suppliers and manage cash flow effectively.

4. Working capital turnover: NetApp's working capital turnover has shown variability over the years, with a notable increase in the most recent year. This ratio measures how efficiently the company is using its working capital to generate sales. A higher working capital turnover ratio indicates that NetApp is generating more revenue per dollar of working capital invested, which is a positive sign of operational efficiency.

Overall, NetApp Inc's activity ratios demonstrate a mix of efficiency levels in managing inventory, receivables, payables, and working capital. Continuous monitoring of these ratios can help assess the company's operational effectiveness and identify areas for improvement in its working capital management.

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Average number of days

Days of inventory on hand (DOH) is a measure of how efficiently a company manages its inventory. NetApp Inc's DOH has been quite stable over the years, ranging from 9.92 days to 16.64 days. A lower DOH indicates that the company is selling its inventory quickly, which can be beneficial for cash flow.

Days of sales outstanding (DSO) measures how long it takes for the company to collect payment after making a sale. NetApp Inc's DSO has fluctuated between 57.23 days and 71.89 days in the last five years. A lower DSO value is preferable as it represents a quicker cash conversion cycle.

The number of days of payables depicts how long a company takes to pay its suppliers. NetApp Inc has seen its days of payables range from 30.86 days to 49.52 days over the past five years. A higher number of days of payables indicates that the company is taking longer to pay its suppliers, which can help in managing cash flow.

Overall, NetApp Inc's activity ratios show a reasonable level of efficiency in managing inventory and collecting payments, although there is some fluctuation in these ratios over the years. Analyzing trends in these ratios can provide insights into the company's working capital management and operational efficiency.

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Long-term

NetApp Inc's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate sales.

The fixed asset turnover ratios have been relatively stable over the past five years, ranging from 7.37 to 10.80 times. This suggests that NetApp is effectively generating sales from its investment in fixed assets such as property, plant, and equipment.

On the other hand, the total asset turnover ratios have shown slight variability over the years, with a range of 0.61 to 0.71. This ratio indicates that NetApp generates approximately 0.61 to 0.71 times in sales for every dollar of total assets.

Overall, NetApp's long-term activity ratios show a consistent ability to efficiently utilize its assets to generate sales, with the fixed asset turnover ratio indicating a particularly strong performance in this aspect.