Qualcomm Incorporated (QCOM)

Activity ratios

Short-term

Turnover ratios

	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Inventory turnover	2.47	2.94	4.42	3.56	6.14
Receivables turnover	18.28	10.50	15.09	8.72	22.90
Payables turnover	8.30	4.91	5.19	4.12	6.29
Working capital turnover	2.79	4.99	4.13	2.39	3.10

1. Inventory Turnover:
Qualcomm's inventory turnover ratio has decreased over the past five years. This indicates the number of times Qualcomm's inventory is sold and replaced during a specific period. A higher inventory turnover is generally favorable as it implies efficient management of inventory levels. The downward trend suggests that Qualcomm may be facing challenges in managing its inventory effectively.

2. Receivables Turnover:
Qualcomm's receivables turnover ratio has fluctuated over the years but has shown an increasing trend overall. This ratio measures how efficiently Qualcomm collects cash from its customers. A higher receivables turnover ratio signifies that Qualcomm is collecting payments from its customers at a faster rate. The improving trend suggests Qualcomm's effectiveness in managing its accounts receivable.

3. Payables Turnover:
Qualcomm's payables turnover ratio has varied over the years but has generally shown an increasing trend. This ratio reflects how quickly Qualcomm is paying its suppliers. A higher payables turnover ratio often indicates that a company is efficiently managing its payments to suppliers. The increasing trend suggests that Qualcomm may be managing its payables more effectively over time.

4. Working Capital Turnover:
Qualcomm's working capital turnover ratio has fluctuated over the years, with some years showing improvement and others a decline. This ratio measures how well Qualcomm generates revenue relative to its working capital. A higher ratio indicates more efficient use of working capital to generate sales. The fluctuating trend suggests variability in Qualcomm's ability to generate revenue relative to its working capital.

Overall, an analysis of Qualcomm's activity ratios indicates mixed performance in managing its inventory, receivables, payables, and working capital turnover. Investors and analysts should consider the trends in these ratios along with other financial metrics to gain a comprehensive understanding of Qualcomm's operational efficiency and financial health.

Average number of days

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Days of inventory on hand (DOH)	days	147.71	124.20	82.61	102.46	59.43
Days of sales outstanding (DSO)	days	19.97	34.75	24.19	41.85	15.94
Number of days of payables	days	43.98	74.35	70.38	88.66	58.07

Days of Inventory on Hand (DOH) measures how quickly a company is turning over its inventory. A higher DOH indicates that the company is holding onto its inventory for a longer period, potentially tying up capital. Qualcomm's DOH has been increasing over the past five years, reaching 147.71 days in 2023, which may signal inefficiencies in inventory management.

Days of Sales Outstanding (DSO) evaluates how long it takes for a company to collect its receivables. A lower DSO is preferable as it signifies faster cash collection. Qualcomm's DSO has fluctuated over the years, with a significant increase in 2022 but a decrease in 2023 to 19.97 days, indicating improvements in collecting receivables efficiently.

Number of Days of Payables assesses how long it takes for a company to pay its suppliers. A longer period of payables suggests the company is taking longer to settle its obligations, potentially indicating favorable payment terms. Qualcomm's number of days of payables has varied but has generally been decreasing, with 43.98 days in 2023, indicating a shorter period to pay suppliers.

In summary, Qualcomm has seen an increase in its Days of Inventory on Hand, a fluctuation in Days of Sales Outstanding, and a decrease in Number of Days of Payables. These ratios together suggest potential inefficiencies in inventory management but improvements in collecting receivables and managing payables.

Long-term

	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Fixed asset turnover	7.10	8.55	7.36	6.34	7.88
Total asset turnover	0.70	0.90	0.81	0.66	0.74

Qualcomm Incorporated's long-term activity ratios provide insights into the company's efficiency in managing its fixed and total assets over the years. The fixed asset turnover ratio indicates how well Qualcomm utilizes its fixed assets to generate revenue. The trend shows fluctuation over the years, with a peak in 2022 at 8.55 and a dip in 2020 to 6.34. This suggests that Qualcomm experienced varying levels of efficiency in utilizing its fixed assets for revenue generation.

On the other hand, the total asset turnover ratio reflects Qualcomm's overall efficiency in generating revenue from all its assets. The trend shows an increase from 2019 to 2022, indicating improved efficiency in utilizing both fixed and current assets to generate sales. However, there was a slight decrease in 2023, which may suggest a potential slowdown in asset utilization efficiency.

Overall, Qualcomm's long-term activity ratios reveal fluctuations in asset turnover efficiency, signifying the need for the company to consistently monitor and optimize its asset management strategies to enhance revenue generation.