Sitime Corporation (SITM)

Short-term

Turnover ratios

Sitime Corporation's inventory turnover ratio has been gradually declining over the past few years, indicating that the company is taking longer to sell its inventory. In 2020, the ratio stood at 4.71, but by the end of 2024, it had dropped to 1.28. This trend suggests potential issues with managing and moving inventory efficiently.

The receivables turnover ratio for Sitime Corporation is not available for any of the years provided. This lack of data makes it challenging to assess how quickly the company is collecting payments from its customers, which is a key aspect of cash flow management.

Similarly, the payables turnover ratio is not available for any of the years, making it difficult to determine how quickly Sitime Corporation is paying its suppliers. This ratio is crucial for understanding the company's relationships with its vendors and its ability to manage working capital effectively.

The working capital turnover ratio for Sitime Corporation has shown fluctuations over the years, ranging from 0.29 in 2023 to 1.24 in 2020. This ratio indicates how efficiently the company is using its working capital to generate sales. The downward trend in recent years suggests that Sitime may be struggling to generate revenue relative to the amount of working capital employed.

In conclusion, Sitime Corporation's activity ratios highlight potential areas of concern regarding inventory management efficiency, cash flow from receivables, payables management effectiveness, and working capital utilization. Further analysis and improvements in these areas may be needed to enhance the company's overall financial performance.

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Average number of days

Based on the provided data for Sitime Corporation, the Days of Inventory on Hand (DOH) ratio has shown a significant increase over the years. The DOH indicates the number of days it takes for a company to convert its inventory into sales. In 2020, Sitime had 77.42 days of inventory on hand, which increased to 108.70 days in 2021. This trend continued with the ratio reaching 209.08 days in 2022, 386.43 days in 2023, and 285.23 days in 2024.

A high DOH ratio can suggest that Sitime may be carrying too much inventory relative to its sales volume, leading to increased storage costs and potentially obsolete inventory.

Additionally, the Days of Sales Outstanding (DSO) and Number of Days of Payables data are not provided, which limits the ability to assess Sitime's effectiveness in collecting receivables and managing payables.

Overall, the increasing trend in the DOH ratio for Sitime raises concerns about its inventory management practices, potentially impacting its overall efficiency and liquidity.

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Long-term

Analyzing Sitime Corporation's long-term activity ratios, we first look at the Fixed Asset Turnover ratio. In 2020, the company had a high Fixed Asset Turnover of 9.92, indicating that Sitime efficiently generated sales using its fixed assets. However, this ratio decreased significantly to 4.75 in 2021 and further to 4.07 in 2022, suggesting a decline in the utilization of fixed assets to generate revenue.

It is worth noting that data for 2023 and 2024 are not available, preventing a full picture of the trend. An absence of data for these years may be indicative of changes in reporting practices or operational disruptions affecting the calculation of this ratio.

Moving on to the Total Asset Turnover ratio, we see a similar trend of decreasing efficiency. Sitime's Total Asset Turnover decreased from 0.85 in 2020 to 0.32 in 2021 and slightly improved to 0.38 in 2022. The downward trend in this ratio indicates that Sitime may not be efficiently utilizing its total assets to generate sales revenue.

In conclusion, based on the available data, Sitime Corporation's long-term activity ratios show a decline in asset turnover efficiency over the years, which may raise concerns about the company's operational effectiveness and profitability. Additional information would be needed to fully assess the reasons behind these trends and their potential impact on the company's long-term financial performance.