Rambus Inc (RMBS)

Short-term

Turnover ratios

1. Inventory Turnover: Rambus Inc.'s inventory turnover has been declining over the past eight quarters, from 9.77 in Q1 2022 to 2.49 in Q4 2023. This indicates that the company is selling its inventory at a slower pace. It may have excess inventory or facing challenges in converting inventory into sales efficiently.

2. Receivables Turnover: The receivables turnover ratio for Rambus Inc. has shown some fluctuations but has mostly been stable around the range of 2.35 to 3.57 over the past eight quarters. This suggests that the company is collecting its receivables at a relatively consistent rate, with Q3 2023 showing the highest turnover in the period.

3. Payables Turnover: Rambus Inc.'s payables turnover has generally been increasing over the quarters, from 3.43 in Q2 2022 to 6.29 in Q3 2023. This indicates that the company is taking longer to pay its suppliers, which may be a positive sign as it reflects improved liquidity or negotiation power with suppliers.

4. Working Capital Turnover: The working capital turnover ratio for Rambus Inc. has shown some fluctuation but has remained relatively stable around 0.94 to 1.19 over the past eight quarters. This ratio measures the efficiency of the company in utilizing its working capital to generate sales. The values indicate that the company is generating revenue using its working capital at a relatively steady pace.

Overall, Rambus Inc.'s activity ratios suggest trends that may require further analysis and monitoring. The declining inventory turnover and stable receivables turnover could indicate potential inefficiencies in managing inventory and collecting receivables. However, the increasing payables turnover ratio and stable working capital turnover suggest some positive aspects regarding payment management and utilization of working capital.

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Average number of days

Rambus Inc.'s activity ratios provide insight into how efficiently the company manages its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH): The trend in DOH shows an increasing number of days to sell off inventory over the quarters of 2022 and 2023, indicating potential issues with inventory management. The DOH has increased from 37.37 days in Q1 2022 to 146.79 days in Q4 2023, suggesting slower inventory turnover and higher carrying costs.

2. Days of Sales Outstanding (DSO): The DSO represents the average number of days it takes for the company to collect payments from customers. Rambus Inc.'s DSO has fluctuated over the quarters, but generally improved from 195.19 days in Q2 2022 to 105.91 days in Q4 2023. A decreasing trend in DSO indicates better accounts receivable management and quicker cash collection.

3. Number of Days of Payables: The number of days of payables reflects how long it takes for a company to pay its suppliers. Rambus Inc. has shown a decreasing trend in the number of days of payables from 106.52 days in Q2 2022 to 73.38 days in Q4 2023. This suggests a more efficient management of accounts payable, potentially enhancing the company's working capital management.

Overall, Rambus Inc. has shown mixed results in its activity ratios, with improvements in DSO and days of payables, but an increase in days of inventory on hand. The company may need to focus on optimizing its inventory management to reduce holding costs and enhance overall operational efficiency.

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Long-term

Rambus Inc.'s long-term activity ratios, namely fixed asset turnover and total asset turnover, provide insights into the company's efficiency in utilizing its assets to generate sales.

1. Fixed Asset Turnover:
The fixed asset turnover ratio for Rambus Inc. shows the company's ability to generate revenue from its fixed or long-term assets. The ratio has fluctuated over the past eight quarters, ranging from 4.81 to 6.80. Higher values indicate that the company is efficiently using its fixed assets to generate sales. Rambus Inc. has generally maintained a healthy fixed asset turnover ratio, with Q4 2023 showing a particularly strong performance at 6.80.

2. Total Asset Turnover:
The total asset turnover ratio measures how effectively the company is using all its assets to generate sales. Rambus Inc.'s total asset turnover ratio has varied over the quarters, ranging from 0.34 to 0.49. A higher ratio signifies that the company is generating more sales relative to its total assets. The trend indicates an improvement in total asset turnover over the quarters, with Q1 2023 recording the highest value of 0.49.

In conclusion, Rambus Inc. has exhibited efficient utilization of both fixed assets and total assets to drive sales over the past eight quarters. The company's ability to generate revenue from its assets is crucial in assessing its operational efficiency and overall performance.