Silicon Laboratories Inc (SLAB)

Short-term

Turnover ratios

The activity ratios provide insights into how efficiently Silicon Laboratories Inc is managing its assets and liabilities.

1. Inventory turnover: This ratio measures how many times a company sells and replaces its inventory during a period. Silicon Laboratories Inc's inventory turnover has been declining over the years, indicating that the company is holding onto its inventory for a longer period before selling it.

2. Receivables turnover: This ratio indicates how quickly the company collects cash from its customers for credit sales. Silicon Laboratories Inc's receivables turnover has been increasing, suggesting that the company has been able to collect cash from its customers at a faster rate.

3. Payables turnover: This ratio shows how quickly the company is paying its suppliers. Silicon Laboratories Inc's payables turnover has been fluctuating over the years, but generally, it indicates that the company is paying its suppliers at a reasonable rate.

4. Working capital turnover: This ratio measures the efficiency of the company in generating revenue from its working capital. Silicon Laboratories Inc's working capital turnover has been increasing, indicating that the company has been able to generate more revenue from its working capital over the years.

Overall, while Silicon Laboratories Inc's inventory turnover has been declining, its receivables turnover and working capital turnover have been improving, reflecting better management of receivables and working capital to generate revenue efficiently. The payables turnover also indicates that the company has been managing its supplier payments effectively.

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Average number of days

Activity ratios, such as Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables, provide insights into how efficiently a company manages its assets and liabilities related to its operations.

1. Days of Inventory on Hand (DOH):
- The trend in DOH for Silicon Laboratories Inc shows fluctuations over the years, with a significant increase from 60.91 days in 2021 to 220.47 days in 2023. This indicates that the company is holding inventory for a longer period before being sold.
- The increase in DOH may suggest either slower inventory turnover or excess inventory levels, which could tie up capital and lead to potential obsolescence or storage costs.

2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for a company to collect payments after a sale. The decreasing trend in DSO from 58.27 days in 2019 to 13.67 days in 2023 is a positive sign, indicating improved efficiency in collecting receivables.
- A lower DSO implies quicker cash collection and improved liquidity, which could be beneficial for funding operations and investments.

3. Number of Days of Payables:
- The fluctuations in the Number of Days of Payables for Silicon Laboratories Inc show variations in the company's payment practices to its suppliers over the years.
- A lower number of days of payables could indicate that the company is paying its suppliers more quickly, potentially to take advantage of discounts or maintain good supplier relationships. Conversely, a higher number of days of payables may suggest that the company is extending payment terms to manage cash flow.

In conclusion, analyzing these activity ratios together provides insights into the efficiency of Silicon Laboratories Inc's operations and its management of inventory, receivables, and payables. Further investigation and comparison with industry benchmarks may help in understanding the company's competitive position and potential areas for improvement.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is generating sales revenue from its investment in fixed assets. Silicon Laboratories Inc has shown a fluctuating trend in this ratio over the past five years, with values ranging from 3.49 to 6.74. A higher ratio indicates that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio reflects how well a company is using its total assets to generate revenue. Silicon Laboratories Inc has also displayed variability in this ratio, ranging from 0.24 to 0.54 over the same period. A higher total asset turnover ratio suggests that the company is efficiently using its total assets to generate sales.

Overall, Silicon Laboratories Inc's long-term activity ratios demonstrate varying levels of efficiency in utilizing its fixed assets and total assets to generate sales revenue. The company's performance in this area has seen fluctuations, indicating the need for further analysis to understand the underlying factors driving these changes in efficiency.