Sitime Corporation (SITM)

Short-term

Turnover ratios

SiTime Corp's activity ratios provide insights into how efficiently the company is managing its resources and operations. Let's analyze the activity ratios based on the provided data:

1. Inventory Turnover:
Inventory turnover indicates how many times a company's inventory is sold and replaced during a period. A higher ratio is generally favorable as it suggests efficient inventory management. SiTime Corp's inventory turnover has been declining over the quarters, indicating that the company is selling its inventory at a slower rate. This could be a sign of excess inventory or challenges in selling products.

2. Receivables Turnover:
Receivables turnover reflects how efficiently a company is collecting its accounts receivable. A higher turnover ratio indicates faster collection of receivables. SiTime Corp's receivables turnover has been relatively stable over the quarters, indicating that the company has been consistently collecting its receivables at a moderate pace.

3. Payables Turnover:
Payables turnover measures how quickly a company is paying its suppliers. A higher ratio suggests that the company is paying its suppliers promptly. SiTime Corp's payables turnover has fluctuated over the quarters, with a general upward trend. This may indicate that the company is taking longer to pay its suppliers, which could potentially strain supplier relationships if not managed effectively.

4. Working Capital Turnover:
The working capital turnover ratio indicates how efficiently a company utilizes its working capital to generate sales. A higher ratio implies better utilization of working capital. SiTime Corp's working capital turnover has shown a decreasing trend over the quarters, suggesting that the company is generating lower sales relative to its working capital. This could indicate inefficiencies in utilizing working capital resources.

In conclusion, SiTime Corp's activity ratios reveal mixed performance in managing its resources and operations efficiently. The company may need to address inventory management issues, monitor receivables collection closely, and assess payment terms to suppliers to enhance its overall efficiency and financial performance.

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Average number of days

Activity ratios provide insight into how efficiently a company is managing its resources and operations. In the case of SiTime Corp, we can analyze the following activity ratios based on the provided data:

1. Days of Inventory on Hand (DOH): This ratio indicates how many days it takes for the company to sell its inventory. We observe an increasing trend from Q1 2022 to Q4 2023, indicating that the company is holding onto its inventory for a longer period. This may suggest issues with inventory management, such as overstocking or slow-moving inventory.

2. Days of Sales Outstanding (DSO): DSO measures how long it takes for the company to collect payment from its customers. The trend fluctuates over the quarters, but we see an increase in Q4 2023 compared to Q2-Q3 2023. A higher DSO may imply difficulties in collecting receivables promptly, potentially impacting cash flow and liquidity.

3. Number of Days of Payables: This ratio reflects how long the company takes to pay its suppliers. SiTime Corp shows variability in the number of days of payables over the quarters, with fluctuations seen in Q1 2022, Q2 2023, and Q4 2023. A longer payment period suggests favorable terms with suppliers but may also indicate potential strains on supplier relationships.

Overall, the analysis of activity ratios for SiTime Corp highlights areas where the company may need to focus on improving efficiency in managing inventory, accounts receivable, and accounts payable to enhance operational performance and cash flow management.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate sales. SiTime Corp's fixed asset turnover has shown a declining trend over the past eight quarters, decreasing from 5.73 in Q1 2022 to 2.63 in Q4 2023. This indicates a reduction in the company's ability to generate sales relative to its investment in fixed assets.

On the other hand, the total asset turnover ratio reflects the company's overall efficiency in generating sales using all its assets, including fixed and current assets. SiTime Corp's total asset turnover has also experienced a downward trajectory, dropping from 0.36 in Q1 2022 to 0.15 in Q4 2023. This suggests that the company is becoming less effective in utilizing its total assets to generate revenue.

Overall, the decreasing trends in both the fixed asset turnover and total asset turnover ratios for SiTime Corp indicate a potential decline in the company's operational efficiency and asset utilization over the past eight quarters. These ratios may signal a need for the company to reevaluate its asset management strategies and operational processes to improve productivity and profitability.