Rambus Inc (RMBS)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.47 | 2.86 | 5.15 | 8.30 | 4.20 |
| Receivables turnover | 3.76 | 3.45 | 2.51 | 1.83 | 1.48 |
| Payables turnover | 5.94 | 5.72 | 4.34 | 6.24 | 6.76 |
| Working capital turnover | 0.91 | 0.85 | 1.14 | 0.79 | 0.40 |
Based on the provided data for Rambus Inc, the analysis of activity ratios reveals the following trends:
1. Inventory Turnover:
- The inventory turnover ratio has shown a fluctuating trend over the years, starting at 4.20 in 2020 and peaking at 8.30 in 2021 before declining in subsequent years.
- A higher inventory turnover ratio indicates that the company is selling its inventory more efficiently. The decrease in the ratio from 2021 onwards may suggest potential inventory management challenges.
2. Receivables Turnover:
- The receivables turnover ratio has consistently increased from 1.48 in 2020 to 3.76 in 2024.
- This upward trend indicates that Rambus Inc is collecting its receivables more frequently, which could signify effective credit and collection management practices.
3. Payables Turnover:
- The payables turnover ratio has shown a slight decrease from 6.76 in 2020 to 5.94 in 2024.
- A decreasing payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could impact its relationship with vendors and cash flow management.
4. Working Capital Turnover:
- The working capital turnover ratio has exhibited variability over the years, with a peak at 1.14 in 2022.
- A higher working capital turnover ratio indicates that the company is efficiently utilizing its working capital to generate sales. The fluctuations in this ratio may reflect changes in Rambus Inc's operational efficiency and revenue generation.
Overall, while the receivables turnover ratio has shown improvement over the period, the fluctuations in inventory turnover, payables turnover, and working capital turnover ratios suggest potential areas for further analysis and operational improvements to enhance efficiency and profitability.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 147.96 | 127.60 | 70.91 | 43.98 | 86.92 |
| Days of sales outstanding (DSO) | days | 96.97 | 105.91 | 145.32 | 199.76 | 247.04 |
| Number of days of payables | days | 61.40 | 63.79 | 84.19 | 58.48 | 54.03 |
Based on the provided data, let's analyze the activity ratios of Rambus Inc:
1. Days of Inventory on Hand (DOH):
- In 2020, Rambus had 86.92 days of inventory on hand. This decreased significantly to 43.98 days in 2021 but then increased to 70.91 days in 2022. The days of inventory on hand further rose to 127.60 days in 2023 and 147.96 days in 2024.
- The decreasing trend from 2020 to 2021 could indicate efficient inventory management. However, the subsequent increase in 2022, 2023, and 2024 suggests a buildup of inventory, which could tie up capital and require a closer look at demand forecasting and supply chain efficiency.
2. Days of Sales Outstanding (DSO):
- Rambus had 247.04 days of sales outstanding in 2020, which dropped to 199.76 days in 2021, 145.32 days in 2022, 105.91 days in 2023, and further to 96.97 days in 2024.
- The declining trend in DSO indicates that the company is collecting its accounts receivable more efficiently over the years, potentially improving cash flow and liquidity.
3. Number of Days of Payables:
- The number of days of payables were 54.03 days in 2020, increased to 58.48 days in 2021, further rose to 84.19 days in 2022, then decreased to 63.79 days in 2023, and 61.40 days in 2024.
- The fluctuating trend in the days of payables could reflect changes in the company's payment terms with suppliers. The increase in days in 2022 could indicate a more extended period to pay suppliers, while the subsequent decreases in 2023 and 2024 suggest a potential effort to improve supplier relationships or cash conservation.
Overall, analyzing these activity ratios for Rambus Inc provides insights into the company's inventory management, accounts receivable collection efficiency, and payment terms with suppliers over the years.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.37 | 6.80 | 5.27 | 5.86 | 4.27 |
| Total asset turnover | 0.41 | 0.37 | 0.45 | 0.27 | 0.20 |
The fixed asset turnover ratio for Rambus Inc has shown a consistent increase over the past five years, from 4.27 in 2020 to 7.37 in 2024. This indicates that the company is generating more revenue per dollar of fixed assets invested, reflecting improved efficiency in utilizing its long-term assets.
On the other hand, the total asset turnover ratio has experienced fluctuations during the same period, reaching its peak at 0.45 in 2022 but then declining to 0.41 in 2024. This suggests that while the company's overall asset utilization efficiency initially improved, it has slightly decreased in recent years.
Overall, the trend in the fixed asset turnover ratio points towards positive long-term asset management and operational efficiency for Rambus Inc. However, the fluctuations in the total asset turnover ratio indicate the need for the company to focus on optimizing the utilization of all its assets to drive further growth and profitability.