Universal Display (OLED)

Short-term

Turnover ratios

The activity ratios provide insights into how efficiently Universal Display manages its resources and operations.

1. Inventory Turnover:
- The inventory turnover ratio has been fluctuating over the years, with a decreasing trend from 2020 to 2022 before a slight increase in 2023 and 2024.
- A lower inventory turnover ratio indicates that inventory is moving more slowly, which could signal potential issues with inventory management or declining sales.

2. Receivables Turnover:
- The receivables turnover data is missing for all years, which makes it challenging to evaluate how effectively Universal Display is collecting payments from its customers.
- Without this ratio, it is difficult to assess the efficiency of the company in managing its accounts receivable.

3. Payables Turnover:
- Similar to receivables turnover, payables turnover data is missing for all years, making it hard to determine how efficiently Universal Display is managing its accounts payable.
- This ratio would have provided insight into how quickly the company pays its suppliers and manages its working capital.

4. Working Capital Turnover:
- The working capital turnover ratio has shown an overall increasing trend from 2020 to 2024, indicating that Universal Display is generating more revenue relative to its working capital investment.
- A higher working capital turnover ratio suggests efficient utilization of working capital to generate sales.

In conclusion, while the working capital turnover ratio shows an improvement in efficiency, the missing data for receivables turnover and payables turnover hinders a comprehensive analysis of Universal Display's overall activity ratios.

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Average number of days

Universal Display's Days of Inventory on Hand (DOH) has shown an increasing trend over the years, from 391.10 days in 2020 to 449.76 days in 2024. This indicates that the company is taking longer to sell its inventory, which may suggest inefficiencies in inventory management or potential inventory obsolescence.

However, there is no data available for Days of Sales Outstanding (DSO) and Number of Days of Payables for the years provided, which limits our ability to assess the company's efficiency in collecting receivables and managing payables.

In conclusion, Universal Display's increasing Days of Inventory on Hand raises concerns about its inventory management efficiency, but the lack of data for DSO and payables hinders a comprehensive analysis of the company's overall activity ratios.

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Long-term

The fixed asset turnover ratio measures how efficiently a company generates revenues from its investments in fixed assets. For Universal Display, the fixed asset turnover ratio has shown a slight improvement from 4.20 in 2020 to 4.30 in both 2021 and 2022. This indicates that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio evaluates how well a company uses its total assets to generate sales. Universal Display's total asset turnover ratio has increased from 0.34 in 2020 to 0.40 in 2022, showing an improvement in the efficiency of the company in generating revenue from its total assets.

However, it is worth noting that there was a slight decline in the total asset turnover ratio in 2023 and 2024, dropping back to 0.35. This could indicate a decrease in the efficiency of Universal Display in utilizing its total assets to generate sales during those years.

In conclusion, Universal Display has generally shown a positive trend in both fixed asset turnover and total asset turnover ratios, indicating efficient utilization of assets to drive revenue. However, the slight decline in total asset turnover in 2023 and 2024 may warrant further investigation to understand the factors impacting the efficiency of asset utilization during those periods.