NXP Semiconductors NV (NXPI)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	2.68	3.19	4.20	4.25	3.57
Receivables turnover	14.85	13.76	11.99	11.26	13.31
Payables turnover	4.92	4.80	3.99	4.42	4.51
Working capital turnover	3.54	3.60	3.99	3.73	6.01

1. Inventory turnover:
NXP Semiconductors NV's inventory turnover has been gradually decreasing over the past five years, indicating that the company is taking longer to sell its inventory. A lower inventory turnover could suggest potential issues with demand for the company's products or inefficiencies in inventory management.

2. Receivables turnover:
The receivables turnover ratio for NXP Semiconductors NV has generally been increasing over the past five years, which indicates that the company is collecting its accounts receivable more efficiently. A higher ratio reflects the effectiveness of the company in converting credit sales into cash.

3. Payables turnover:
The payables turnover ratio for NXP Semiconductors NV has shown some fluctuations over the five-year period. However, the company has been able to manage its payables effectively, ensuring timely payments to suppliers. A higher payables turnover ratio suggests that the company is efficiently managing its trade payables.

4. Working capital turnover:
NXP Semiconductors NV's working capital turnover has decreased over the years, indicating that the company is generating less revenue relative to its working capital. A lower working capital turnover may suggest inefficiencies in the utilization of working capital or decreased revenue generation from the current assets.

Overall, while the inventory turnover and working capital turnover ratios have shown a declining trend, the receivables turnover and payables turnover ratios have been relatively stable or improving. This indicates that NXP Semiconductors NV is managing its accounts receivable and accounts payable effectively, despite potential challenges in inventory and working capital management.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	136.10	114.35	86.87	85.89	102.16
Days of sales outstanding (DSO)	days	24.58	26.54	30.45	32.42	27.43
Number of days of payables	days	74.24	76.04	91.47	82.64	80.90

NXP Semiconductors NV's activity ratios provide insights into how efficiently the company manages its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH): NXP's DOH has been increasing over the past five years, from 102.16 days in 2019 to 136.10 days in 2023. This suggests that the company is holding inventory for a longer period before selling it, which could tie up capital and increase storage costs.

2. Days of Sales Outstanding (DSO): NXP's DSO has shown a decreasing trend, indicating improvements in collecting receivables efficiently. The DSO decreased from 27.43 days in 2019 to 24.58 days in 2023, reflecting that the company is getting paid faster for its sales.

3. Number of Days of Payables: The number of days NXP takes to pay its suppliers has fluctuated over the years. In 2023, the days of payables decreased to 74.24 days from 103.76 days in 2022. A lower number of days of payables suggests the company is settling its payables more quickly, which could impact cash flow management and vendor relations.

Overall, NXP Semiconductors NV's activity ratios indicate areas where the company is improving efficiencies (DSO) and areas that may need attention (DOH, days of payables). It is important for the company to strike a balance between managing inventory effectively, collecting receivables efficiently, and optimizing payment terms with suppliers to enhance its overall working capital management.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	4.00	4.25	4.20	3.77	3.63
Total asset turnover	0.55	0.57	0.53	0.43	0.44

NXP Semiconductors NV's long-term activity ratios reflect the company's efficiency in managing its fixed assets and total assets to generate sales. The fixed asset turnover, which measures how effectively the company is utilizing its fixed assets to generate revenue, has been relatively stable over the past five years, ranging from 3.63 to 4.25 times. This indicates that NXP Semiconductors NV has been able to efficiently utilize its fixed assets to generate sales, with a slight decrease in 2020 and a subsequent increase in 2022.

On the other hand, the total asset turnover, which measures the company's overall efficiency in generating sales from all its assets, shows a fluctuating trend over the same period. The ratio has ranged from 0.43 to 0.57 times, with a general upward trend from 2019 to 2022 before a slight decrease in 2023. This suggests that NXP Semiconductors NV has been improving its overall asset utilization efficiency, with a notable increase in 2022.

Overall, the company's long-term activity ratios indicate that NXP Semiconductors NV has been effectively utilizing both its fixed assets and total assets to generate sales, with a focus on improving efficiency in asset turnover over the years.