Qorvo Inc (QRVO)
Activity ratios
Short-term
Turnover ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.21 | 2.85 | 3.12 | 4.20 | 3.71 |
| Receivables turnover | 8.82 | 10.78 | 7.73 | 8.78 | 8.69 |
| Payables turnover | 9.02 | 10.79 | 7.20 | 6.79 | 7.76 |
| Working capital turnover | 3.10 | 2.42 | 2.62 | 2.23 | 2.81 |
Activity ratios provide insights into the efficiency and effectiveness of a company's management of its assets and liabilities.
1. Inventory Turnover:
- Qorvo Inc's inventory turnover has been relatively consistent over the past five years, ranging from 2.85 to 4.20 times. This indicates that the company is able to efficiently manage its inventory levels, converting it into sales effectively. A higher turnover ratio is generally preferred as it signifies quicker sales and reduced risk of obsolete inventory.
2. Receivables Turnover:
- The receivables turnover ratio has shown some variability over the years but has generally remained above 7. This suggests that Qorvo Inc has been successful in collecting payments from customers in a timely manner. A higher turnover ratio indicates that the company is efficient in managing its accounts receivables.
3. Payables Turnover:
- The payables turnover ratio has fluctuated over the years, but it has consistently been above 6. This implies that Qorvo Inc has a relatively short payment period to its suppliers, potentially benefiting from trade credit terms. A higher payables turnover ratio may indicate good relationships with suppliers or the ability to negotiate favorable payment terms.
4. Working Capital Turnover:
- The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Qorvo Inc's working capital turnover has generally trended upward over the past five years, indicating improved efficiency in utilizing its working capital to generate revenues. A higher working capital turnover ratio suggests that the company is efficient in managing its current assets and liabilities.
Overall, Qorvo Inc's activity ratios highlight its efficient management of inventory, receivables, payables, and working capital, which are essential for sustaining operational efficiency and financial health.
Average number of days
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 113.70 | 127.95 | 116.91 | 86.94 | 98.46 |
| Days of sales outstanding (DSO) | days | 41.38 | 33.85 | 47.22 | 41.58 | 41.98 |
| Number of days of payables | days | 40.48 | 33.84 | 50.73 | 53.74 | 47.01 |
Days of inventory on hand (DOH) measures how long it takes for a company to sell its inventory. Qorvo Inc's DOH has fluctuated over the past five years, with a peak in 2013 and a decrease in 2021. This may suggest better inventory management efficiency in recent years.
Days of sales outstanding (DSO) indicates the average number of days it takes for a company to collect revenue after a sale. Qorvo Inc's DSO has shown variations but has generally been consistent over the past five years. The lower DSO values in 2021 and 2020 indicate quicker collection of sales revenues.
Number of days of payables measures how long it takes a company to pay its suppliers. Qorvo Inc's days of payables have fluctuated over the years, with lower values in 2023 and 2024 compared to the previous years. This may suggest improved payment terms negotiation with suppliers.
In summary, Qorvo Inc has shown improvements in inventory management efficiency and quicker collection of sales revenues in recent years. The company has also displayed variability in payment terms with suppliers, possibly indicating a strategic approach to managing working capital.
Long-term
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.33 | 3.10 | 3.71 | 3.17 | 2.57 |
| Total asset turnover | 0.58 | 0.53 | 0.62 | 0.56 | 0.49 |
The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. Qorvo Inc's fixed asset turnover has been showing a positive increasing trend over the past five years, indicating an improvement in utilizing its fixed assets to generate sales. The ratio has increased from 2.57 in 2020 to 4.33 in 2024, showcasing a significant improvement in efficiency.
On the other hand, the total asset turnover ratio reflects how efficiently a company utilizes all its assets to generate sales. Qorvo Inc's total asset turnover has also been on an upward trajectory over the same period. The ratio has grown from 0.49 in 2020 to 0.58 in 2024, demonstrating an enhancement in the company's ability to generate sales relative to its total assets.
Overall, the increasing trends in both the fixed asset turnover and total asset turnover ratios suggest that Qorvo Inc has been effectively utilizing its assets to drive sales growth and improve its operational efficiency over the years.