NVIDIA Corporation (NVDA)

Short-term

Turnover ratios

Based on the provided data, we can evaluate the activity ratios of NVIDIA Corporation as follows:

1. Inventory Turnover: This ratio indicates how efficiently the company is managing its inventory. The trend shows an improvement in inventory turnover from 2.25 in January 2023 to 3.24 in January 2025. This demonstrates that NVIDIA has been able to sell its inventory faster in recent years.

2. Receivables Turnover: The receivables turnover ratio reflects how effectively the company is collecting payments from its customers. The data suggests some missing values in this ratio, making it difficult to draw a complete trend analysis. However, a higher turnover ratio would typically indicate a shorter time period for collecting payments from customers.

3. Payables Turnover: This ratio measures how quickly the company pays its suppliers. Similar to the receivables turnover, there are missing values in the payables turnover ratio, making it hard to provide a comprehensive analysis. Generally, a lower payables turnover ratio could indicate that the company takes longer to pay its suppliers.

4. Working Capital Turnover: This ratio assesses how efficiently the company is utilizing its working capital to generate revenue. The trend in working capital turnover has shown an increase from 1.63 in January 2023 to 2.10 in January 2025. This improvement signifies that NVIDIA has been able to generate more revenue per unit of working capital over the years.

In conclusion, NVIDIA Corporation has demonstrated improvements in its inventory turnover and working capital turnover ratios, indicating better efficiency in managing inventory and utilizing working capital to generate revenue. However, the analysis of receivables and payables turnover is limited due to missing data points.

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Average number of days

NVIDIA Corporation's activity ratios indicate the efficiency of its operations in managing inventory, sales, and payables.

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have decreased from 162.08 days in January 2023 to 112.72 days in January 2025. This indicates that NVIDIA has been able to improve its inventory management by reducing the number of days it takes to sell its inventory, which can free up working capital and improve the company's liquidity.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding show the number of days it takes for the company to collect revenue from its customers. NVIDIA's DSO was 51.79 days in January 2023, increased to 59.91 days in January 2024, and then remained the same at 59.91 days in January 2025. A higher DSO could indicate potential issues with collecting payments promptly, leading to cash flow problems.

3. Number of Days of Payables:
- The number of days of payables represents how long it takes for NVIDIA to pay its suppliers. The company had 37.48 days in January 2023, increased to 59.27 days in January 2024, and remained unchanged in January 2025. A longer payment period may indicate that NVIDIA is taking longer to settle its obligations, potentially impacting relationships with suppliers.

Overall, while NVIDIA has effectively reduced its days of inventory on hand, the company needs to monitor its days of sales outstanding and number of days of payables to ensure optimal efficiency in its operations and cash flow management.

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See also:

NVIDIA Corporation Short-term (Operating) Activity Ratios

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Long-term

NVIDIA Corporation's fixed asset turnover ratio has shown a significant improvement over the years, increasing from 7.09 in January 2023 to 15.57 in January 2024. This indicates that the company has been able to generate more revenue per dollar invested in fixed assets during this period.

In terms of total asset turnover, NVIDIA Corporation's ratio has also demonstrated positive growth, increasing from 0.65 in January 2023 to 1.17 in January 2025. This suggests that the company has become more efficient in utilizing its total assets to generate sales over the years.

Overall, the long-term activity ratios of NVIDIA Corporation reflect a positive trend, indicating improved efficiency in utilizing both fixed and total assets to generate revenue. This could be a positive sign of effective asset management and operational performance within the company.

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See also:

NVIDIA Corporation Long-term (Investment) Activity Ratios