Onto Innovation Inc (ONTO)

Short-term

Turnover ratios

Onto Innovation Inc's activity ratios provide insight into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period. Onto Innovation Inc's inventory turnover has been relatively stable, ranging from 1.21 to 1.64 over the years. A higher turnover ratio indicates efficient management of inventory levels.

2. Receivables Turnover: The receivables turnover ratio reflects how quickly a company collects payments from its customers. Onto Innovation Inc's data shows varying performance in this ratio, with values of 3.20 to 4.16, except for 2021 where data is missing. A higher turnover ratio suggests effective credit management and collection practices.

3. Payables Turnover: The payables turnover ratio measures how quickly a company pays off its suppliers. Onto Innovation Inc's payables turnover has shown a slight increase over the years, ranging from 6.75 to 8.55. A higher turnover ratio indicates efficient management of accounts payable.

4. Working Capital Turnover: The working capital turnover ratio evaluates the company's ability to generate revenue from its working capital. Onto Innovation Inc's working capital turnover has fluctuated slightly over the years, with values ranging from 0.72 to 1.03. A higher turnover ratio suggests better utilization of working capital to drive sales.

Overall, Onto Innovation Inc's activity ratios reflect a mixed performance in managing its operational efficiency. Further analysis and comparison with industry benchmarks may provide a more comprehensive understanding of the company's operational effectiveness.

---

Average number of days

The activity ratios of Onto Innovation Inc indicate how effectively the company is managing its assets and operations.

1. Days of Inventory on Hand (DOH):
- The DOH measures how many days, on average, it takes for the company to sell its inventory.
- The trend in Onto Innovation's DOH shows fluctuations over the years, ranging from 221.92 days to 302.41 days.
- A lower DOH is generally preferable as it indicates faster inventory turnover and efficient management.

2. Days of Sales Outstanding (DSO):
- DSO reflects the average number of days it takes for the company to collect payments from its customers.
- Onto Innovation's DSO varied from 87.66 days to 113.92 days.
- A lower DSO suggests faster collections, improved cash flow, and efficient credit management practices.

3. Number of Days of Payables:
- This ratio represents the average number of days it takes for the company to pay its suppliers.
- Onto Innovation's days of payables ranged from 42.71 days to 54.11 days.
- A longer period of payables may indicate strong negotiation power with suppliers, but it can also signal liquidity challenges.

Overall, analyzing these activity ratios can provide insights into Onto Innovation's efficiency in managing its inventory, accounts receivable, and accounts payable, which are crucial for its operational performance and financial health.

---

Long-term

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. Onto Innovation Inc's fixed asset turnover has shown an overall increasing trend over the five-year period, from 6.05 in 2020 to 7.97 in 2024. This indicates improved efficiency in generating revenue from its fixed assets.

On the other hand, the total asset turnover ratio reflects how well a company utilizes all its assets to generate revenue. Onto Innovation Inc's total asset turnover also shows a general upward trend from 0.38 in 2020 to 0.47 in 2024. This improvement suggests that the company is becoming more effective in utilizing all its assets to generate sales.

Overall, both the fixed asset turnover and total asset turnover ratios of Onto Innovation Inc have improved over the years, indicating increased efficiency in utilizing assets to generate revenue. This positive trend suggests potential operational improvements and better utilization of resources within the company over the five-year period.