Universal Display (OLED)

Short-term

Turnover ratios

Universal Display Corp.'s activity ratios provide insights into the efficiency of the company's operations in managing its assets and liabilities.

1. Inventory Turnover:
- The inventory turnover has been decreasing over the years, from 1.18 in 2019 to 0.77 in 2023. This indicates that the company is taking longer to sell its inventory, which may lead to holding excess inventory and potential obsolescence.

2. Receivables Turnover:
- The receivables turnover has fluctuated over the years but generally remained above 5 times. A high receivables turnover ratio indicates efficient credit management and timely collection of receivables.

3. Payables Turnover:
- The payables turnover has been increasing over the years, from 5.67 in 2019 to 12.38 in 2023. This suggests that the company is taking longer to pay its suppliers, potentially indicating favorable credit terms or liquidity constraints.

4. Working Capital Turnover:
- The working capital turnover ratio has also fluctuated over the years. A lower ratio indicates that the company is generating less revenue per dollar of working capital, which may suggest inefficiencies in managing working capital.

Overall, Universal Display Corp. should focus on improving its inventory turnover to prevent excess inventory buildup, continue managing receivables efficiently, and consider optimizing its payables turnover for better cash flow management. Additionally, enhancing the working capital turnover can lead to a more effective utilization of working capital resources.

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Average number of days

Activity ratios provide insights into how efficiently a company is managing its assets and generating revenue. Let's analyze the activity ratios of Universal Display Corp. based on the provided data:

1. Days of Inventory on Hand (DOH):
- The trend for DOH for Universal Display Corp. has been fluctuating over the years, from 309.69 days in 2019 to 473.98 days in 2023. This suggests that the company held inventory for a longer period in 2023 compared to previous years, which may indicate slower inventory turnover or possibly overstocking.

2. Days of Sales Outstanding (DSO):
- The DSO for Universal Display Corp. saw a significant increase from 54.46 days in 2019 to 88.55 days in 2023. This indicates that the company is taking longer to collect its accounts receivable, which could potentially impact cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables for Universal Display Corp. decreased from 64.39 days in 2019 to 29.48 days in 2023. A lower number of days of payables may suggest that the company is paying its suppliers more quickly, which could be beneficial in maintaining good supplier relationships.

In summary, Universal Display Corp. should closely monitor its inventory management, accounts receivable collection process, and payment practices to enhance operational efficiency and optimize its working capital management.

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Long-term

The fixed asset turnover ratio for Universal Display Corp. has been declining over the past five years, indicating that the company is generating less revenue from its fixed assets. This could be a potential area of concern as it suggests inefficiency in utilizing its long-term assets to generate sales.

On the other hand, the total asset turnover ratio has also been fluctuating but generally staying at low levels. This indicates that the company is not effectively utilizing its total assets to generate sales. A low total asset turnover ratio could be a sign of underutilization of assets or inefficient operations.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Universal Display Corp. may need to focus on improving its operational efficiency and asset utilization to enhance its long-term activity ratios and drive better financial performance.