Sanmina Corporation (SANM)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 5.72 | 4.32 | 5.98 | 7.47 | 8.49 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | 5.24 | 3.56 | 4.25 | 5.32 | 5.72 |
| Working capital turnover | 4.82 | 5.56 | 4.48 | 5.37 | 6.65 |
The activity ratios of Sanmina Corp provide insight into the efficiency of the company's operations.
1. Inventory turnover has shown a fluctuating trend, decreasing from 8.49 in 2019 to 5.55 in 2023. This suggests that the company is taking longer to sell its inventory, which could indicate potential issues with inventory management or changing demand patterns.
2. Receivables turnover has generally remained steady, with a slight increase in 2023 compared to 2022. This indicates that the company is collecting its receivables efficiently, although the increase in 2023 could be a result of more aggressive or successful collection efforts.
3. Payables turnover has been increasing steadily over the years, indicating that the company is taking longer to pay its suppliers. This can be a strategy to improve working capital or negotiate better payment terms with suppliers.
4. Working capital turnover has shown a declining trend, indicating that the company is generating less revenue per dollar of working capital. This could be a concern if it reflects declining sales or inefficient utilization of working capital.
Overall, while the receivables turnover suggests efficient collection of receivables, the decreasing inventory turnover and declining working capital turnover raise concerns about the efficiency of the company's operations and potential impacts on profitability.
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 | 63.79 | 84.57 | 61.03 | 48.86 | 43.01 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | 69.64 | 102.52 | 85.81 | 68.64 | 63.85 |
Days of inventory on hand (DOH) measures how many days it takes for the company to sell its inventory. A lower DOH indicates better inventory management and faster turnover. Over the years, Sanmina Corp has shown fluctuations in its DOH, with a significant increase in 2022 and a decrease in 2023 compared to the previous years.
Days of sales outstanding (DSO) reflects the average number of days it takes for the company to collect revenue after a sale. A lower DSO indicates efficient credit and collection policies. Sanmina Corp has shown fluctuations in its DSO, with a decrease in 2023 compared to 2022, but still higher than in 2019.
Number of days of payables indicates the average number of days it takes the company to pay its suppliers. A higher number indicates that the company is taking longer to pay its bills, which may imply favorable terms with suppliers. Sanmina Corp has shown a fluctuating trend in its payables days over the years, with a decrease in 2023 compared to 2022.
Overall, the trends in these activity ratios suggest that Sanmina Corp has experienced fluctuations in its inventory management, collection of receivables, and payment of payables over the years. Monitoring these ratios can provide insights into the company's operational efficiency and working capital management.
Long-term
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 14.06 | 13.72 | 12.68 | 12.45 | 13.06 |
| Total asset turnover | 1.83 | 1.63 | 1.61 | 1.84 | 2.11 |
The long-term activity ratios for Sanmina Corp indicate the efficiency of the company in utilizing its assets to generate sales.
Fixed asset turnover has been relatively consistent over the past five years, with the ratio ranging from 12.45 to 14.12. This demonstrates that the company has been effectively using its fixed assets to generate revenue, with a slight improvement observed in the most recent period.
Total asset turnover, on the other hand, has shown more variability, decreasing from 2.11 in 2019 to 1.61 in 2021, and then increasing to 1.83 in 2023. This suggests that the company's overall efficiency in generating sales from all its assets fluctuated over the years, but has shown a slight improvement in the most recent period.
In conclusion, the fixed asset turnover indicates stable and efficient utilization of fixed assets, while the total asset turnover reflects some variability, but with an overall improvement in the most recent year.