Sanmina Corporation (SANM)

Short-term

Turnover ratios

The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times it turns over its inventory during a specific period. Sanmina Corporation's inventory turnover has fluctuated over the past few quarters but generally remained within a range of 3 to 9 times. A higher inventory turnover typically indicates effective inventory management, as seen in Sanmina's improving trend from Q1 2022 to Q4 2023.

The receivables turnover ratio, which reflects how quickly a company collects its outstanding receivables, was not provided in the data. Without this metric, it is challenging to assess Sanmina's effectiveness in collecting payments from its customers.

The payables turnover ratio demonstrates how efficiently a company pays its suppliers by showing how many times it pays off its accounts payable during a period. Sanmina's payables turnover has also varied but generally stayed around 2 to 6 times. A higher payables turnover suggests that Sanmina is managing its trade payables effectively, as shown by the decreasing trend from Q1 2020 to Q4 2023.

The working capital turnover ratio evaluates how efficiently a company utilizes its working capital to generate sales. Sanmina's working capital turnover has been relatively stable, indicating consistent performance in using its working capital to generate revenue. The increasing trend from Q1 2020 to Q4 2023 suggests that Sanmina has been managing its working capital effectively to support its business operations.

Overall, based on the activity ratios analyzed, Sanmina Corporation appears to have shown improvement in managing its inventory, payables, and working capital efficiency over the past few quarters. However, further information on receivables turnover would provide a more comprehensive assessment of the company's performance in managing its receivables.

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Average number of days

Based on the provided data, we analyze the activity ratios of Sanmina Corporation over the past several periods:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have shown fluctuations over the periods, ranging from a low of 42.14 days to a high of 111.92 days.
- The trend indicates some variability in managing inventory levels, with a spike in DOH in the second half of 2022 gradually decreasing to around 60-70 days in recent periods.
- Overall, Sanmina has made efforts to optimize its inventory management, as evidenced by the decreasing trend in recent quarters.

2. Days of Sales Outstanding (DSO):
- The data for days of sales outstanding is not provided for the periods under review, indicating a lack of information on how quickly the company collects its accounts receivable.
- Without DSO data, it is challenging to assess the efficiency of Sanmina in collecting receivables and managing its sales cycle.

3. Number of Days of Payables:
- The number of days of payables has varied significantly over the periods, ranging from 58.94 days to 139.12 days.
- There is a noticeable upward trend in the number of days of payables, with peaks in the second half of 2023 and 2022, suggesting the company is taking longer to pay its suppliers.
- Sanmina may be strategically using its payables to manage cash flows or negotiate better terms with suppliers, but prolonged payables could potentially strain supplier relationships if not managed effectively.

In conclusion, Sanmina Corporation has shown improvements in managing its inventory levels, though there are concerns regarding the increasing trend in the number of days of payables. Further analysis of days of sales outstanding would provide a more comprehensive view of the company's efficiency in managing working capital and liquidity.

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Long-term

The fixed asset turnover ratio for Sanmina Corporation has been relatively stable over the past few years, averaging around 13. This indicates that the company generates approximately 13 times in sales for every dollar invested in fixed assets. A higher fixed asset turnover ratio is generally favorable as it signifies efficient utilization of fixed assets to generate revenue.

On the other hand, the total asset turnover ratio has shown more variability, ranging from 1.50 to 1.82 in the recent quarters. This ratio reflects how effectively the company is using its total assets to generate revenue. The lower values in some quarters may suggest that Sanmina Corporation might not be utilizing its total assets as efficiently to generate sales compared to the industry average or previous periods.

Overall, the fixed asset turnover ratio indicates that Sanmina Corporation efficiently utilizes its fixed assets to generate revenue. However, the variability in the total asset turnover ratio points towards fluctuating efficiency in utilizing total assets to generate sales, which may warrant further investigation into the company's asset management strategies.