PDF Solutions Inc (PDFS)

Short-term

Turnover ratios

The activity ratios of PDF Solutions Inc. indicate how efficiently the company is managing its assets and liabilities to generate sales. In terms of receivables turnover, the company has been improving over the years, with a steady increase from 2.11 in 2019 to 3.69 in 2023. This suggests the company is collecting its accounts receivable more quickly, which is a positive sign.

The payables turnover ratio has also shown improvement, increasing from 4.38 in 2019 to 20.21 in 2023. This indicates that the company is taking longer to pay its suppliers, which may reflect improved cash management or negotiation of more favorable credit terms.

The working capital turnover ratio has generally increased over the years, peaking at 1.13 in 2023 from 0.72 in 2019. A higher working capital turnover ratio indicates that the company is effectively utilizing its working capital to generate sales, which is a positive indicator of operational efficiency.

Overall, the trends in PDF Solutions Inc.'s activity ratios suggest that the company is becoming more efficient in managing its working capital, collecting receivables, and managing payables, which bodes well for its financial health and operational performance.

---

Average number of days

Activity ratios are used to measure how efficiently a company utilizes its assets to generate sales and manage its operations. In the case of PDF Solutions Inc., we can analyze its activity ratios for the past five years based on the data provided.

1. Days of Inventory on Hand (DOH):
Unfortunately, the data for Days of Inventory on Hand (DOH) for PDF Solutions Inc. is not available in the provided table for any of the years analyzed. DOH measures how long it takes for a company to sell its inventory, indicating the efficiency of inventory management.

2. Days of Sales Outstanding (DSO):
The Days of Sales Outstanding (DSO) for PDF Solutions Inc. has shown a decreasing trend from 173.37 days in 2019 to 98.83 days in 2023. This ratio represents the average number of days it takes for the company to collect payment after making a sale. A lower DSO indicates faster collection of receivables, which is a positive sign for cash flow management.

3. Number of Days of Payables:
PDF Solutions Inc.'s Number of Days of Payables has fluctuated over the years, with a decrease from 83.26 days in 2019 to 18.06 days in 2023. This ratio measures how long it takes a company to pay its suppliers. A lower number of days of payables could indicate improved liquidity and a more efficient use of working capital.

Overall, based on the activity ratios analyzed, PDF Solutions Inc. has shown improvements in managing its accounts receivable and accounts payable over the years, leading to potential enhancements in cash flow management and working capital efficiency. The lack of data for Days of Inventory on Hand limits a comprehensive analysis of the company's inventory management efficiency.

---

Long-term

PDF Solutions Inc.'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 ratio has been consistently improving over the past five years, indicating that the company is generating more sales per dollar of fixed assets invested. The ratio increased from 2.10 in 2019 to 4.44 in 2023, reflecting a significant improvement in utilizing fixed assets efficiently.

Similarly, the total asset turnover ratio also shows an increasing trend, although with fluctuations. The company's ability to generate sales from its total assets has improved from 0.36 in 2019 to 0.57 in 2023. This indicates that PDF Solutions Inc. has been more effective in utilizing its total assets to drive revenue over the years.

Overall, the improving trend in both fixed asset turnover and total asset turnover ratios suggests that PDF Solutions Inc. is becoming more efficient in managing its long-term assets to generate revenue, which is a positive sign for investors and stakeholders.