NXP Semiconductors NV (NXPI)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	2.68	2.64	2.69	2.87	3.19	3.54	3.69	3.92	4.20	4.16	4.28	4.32	4.25	3.99	3.38	3.55
Receivables turnover	14.85	14.02	12.42	—	13.76	—	—	—	11.99	—	—	—	11.26	—	—	—
Payables turnover	4.92	5.90	5.86	5.67	4.80	3.65	3.69	3.76	3.99	4.28	4.10	4.42	4.42	6.10	5.70	4.87
Working capital turnover	3.54	3.61	3.92	4.20	3.60	3.71	3.65	4.79	3.99	8.21	3.36	5.21	3.73	3.83	3.78	6.34

NXP Semiconductors NV's activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate sales and turnovers.

1. Inventory Turnover: The trend in inventory turnover indicates a slight decline from 3.19 in Q4 2022 to 2.68 in Q4 2023. This could suggest that NXP is holding inventory for a longer period before selling it, which may tie up capital and increase holding costs. However, the turnover rate remains within a reasonable range.

2. Receivables Turnover: The receivables turnover ratio has shown some fluctuations over the quarters but generally remains stable between 12.41 and 14.85. This indicates that NXP is efficient in collecting payments from customers, with a shorter collection period, which is a positive sign for liquidity management.

3. Payables Turnover: The payables turnover ratio has been relatively consistent, hovering around 4.0, except for a notable increase in Q3 2023. This suggests that NXP is managing its payables effectively, possibly negotiating favorable terms with suppliers to extend payment periods without straining liquidity.

4. Working Capital Turnover: The working capital turnover ratio shows how effectively NXP utilizes its working capital to generate sales. The ratio has varied but generally remains stable, with a slight decrease from 4.79 in Q1 2022 to 3.54 in Q4 2023. This may indicate that NXP could be less efficient in converting working capital into revenue in recent quarters.

Overall, NXP Semiconductors NV's activity ratios reflect a mixed performance in managing its assets and liabilities efficiently to drive sales. While the company shows strengths in receivables turnover and payables management, there may be opportunities to improve inventory turnover and working capital utilization for better operational efficiency.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	136.10	138.03	135.68	127.04	114.35	103.07	98.84	93.04	86.87	87.68	85.18	84.43	85.89	91.38	107.95	102.84
Days of sales outstanding (DSO)	days	24.58	26.03	29.39	—	26.54	—	—	—	30.45	—	—	—	32.42	—	—	—
Number of days of payables	days	74.24	61.85	62.27	64.39	76.04	100.00	98.84	97.16	91.47	85.21	89.07	82.59	82.64	59.86	64.09	75.01

Analyzing NXP Semiconductors NV's activity ratios, we can observe the following trends:

1. Days of Inventory on Hand (DOH):
- The company's DOH has been increasing steadily over the past eight quarters, reaching 136.10 days in Q4 2023. This indicates that NXP Semiconductors NV is holding inventory for a longer period before it is sold.
- A higher DOH could imply inefficiencies in inventory management or potential obsolescence risks if inventory levels remain elevated for extended periods.
- NXP Semiconductors NV may need to reassess its inventory management practices to optimize working capital and reduce carrying costs.

2. Days of Sales Outstanding (DSO):
- The DSO for NXP Semiconductors NV has been fluctuating over the quarters, with a slight decrease to 24.58 days in Q4 2023. This indicates the number of days it takes the company to collect its accounts receivable.
- Lower DSO values suggest that the company is efficient in collecting payments from customers, improving cash flow.
- NXP Semiconductors NV should focus on maintaining a low DSO to ensure a steady inflow of cash and timely receipt of payments.

3. Number of Days of Payables:
- The days of payables for NXP Semiconductors NV have varied over the quarters, with an increase to 74.24 days in Q4 2023. This indicates the number of days it takes the company to pay its suppliers and vendors.
- A longer payment period could potentially indicate favorable credit terms negotiated with suppliers, but it may also signal liquidity challenges or strained supplier relationships.
- NXP Semiconductors NV should strike a balance between managing payables effectively to preserve liquidity and maintaining strong supplier relationships.

In conclusion, NXP Semiconductors NV should focus on optimizing its inventory management practices, maintaining efficient accounts receivable collections, and effectively managing payables to enhance working capital efficiency and overall liquidity position.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	4.00	4.12	4.18	4.22	4.25	4.35	4.24	4.13	4.20	4.20	4.18	3.97	3.77	3.73	3.63	3.75
Total asset turnover	0.55	0.55	0.55	0.56	0.57	0.56	0.55	0.55	0.53	0.53	0.48	0.47	0.43	0.40	0.40	0.46

The fixed asset turnover ratio for NXP Semiconductors NV has been relatively stable over the past eight quarters, ranging between 4.00 and 4.25. This indicates that the company generates approximately $4 to $4.25 in revenue for every dollar invested in fixed assets. The consistency of this ratio suggests efficient utilization of fixed assets to generate sales.

On the other hand, the total asset turnover ratio has also remained relatively stable around 0.55 to 0.57 over the same period. This implies that NXP Semiconductors NV generates $0.55 to $0.57 in revenue for every dollar of total assets invested. The stability of this ratio indicates consistent operational efficiency in utilizing the company's total assets to generate sales.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that NXP Semiconductors NV efficiently utilizes its assets to generate revenue, with both ratios showing a consistent performance over the past eight quarters.