Silicon Laboratories Inc (SLAB)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities.

1. Inventory Turnover: Silicon Laboratories Inc's inventory turnover has fluctuated over the years, with a peak of 5.99 in 2021 and a low of 1.66 in 2023. A higher turnover indicates that the company is selling its inventory more frequently, which can be positive for cash flow and reducing carrying costs.

2. Receivables Turnover: The receivables turnover for Silicon Laboratories Inc has shown a significant increase from 5.37 in 2020 to 26.70 in 2023. This indicates that the company is collecting its receivables at a faster rate, which may signify effective credit and collection policies.

3. Payables Turnover: The payables turnover ratio for Silicon Laboratories Inc has generally been stable, hovering around 4-6 over the years. A higher turnover implies that the company is paying its suppliers faster, which can indicate strong relationships with vendors.

4. Working Capital Turnover: The working capital turnover has shown fluctuations, with a low of 0.46 in 2021 and a high of 1.36 in 2023. A higher turnover suggests that the company is utilizing its working capital efficiently to generate sales revenue.

Overall, analyzing these activity ratios provides valuable insights into Silicon Laboratories Inc's operational efficiency and effectiveness in managing its assets and liabilities over the years.

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Average number of days

Based on the provided data for Silicon Laboratories Inc, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- In 2020, the company had inventory on hand for an average of 80.85 days before selling it.
- In 2021, the DOH decreased to 60.91 days, indicating improved inventory management.
- However, in 2022, the DOH increased significantly to 96.06 days, suggesting potential issues with inventory turnover.
- The DOH spiked in 2023 to 220.47 days, reflecting possible excess inventory or slowing sales.
- In 2024, the DOH decreased to 141.66 days, but still remained relatively high compared to previous years.

2. Days of Sales Outstanding (DSO):
- The DSO for the company decreased from 67.99 days in 2020 to 49.78 days in 2021, indicating faster collection of accounts receivable.
- In 2022, the DSO dropped further to 25.46 days, reflecting efficient collection practices.
- The DSO decreased significantly to 13.67 days in 2023, highlighting strong management of accounts receivable.
- However, the DSO increased slightly to 34.03 days in 2024, suggesting a potential slowdown in collections.

3. Number of Days of Payables:
- In 2020, the company took an average of 92.82 days to pay its suppliers.
- The number of days of payables decreased to 58.46 days in 2021, indicating quicker payment processing.
- In 2022, the days of payables increased to 85.96 days, potentially signaling changing supplier terms or payment practices.
- The number of days of payables decreased to 65.24 days in 2023.
- In 2024, the trend continued with a further decrease to 56.92 days, showing efficient management of payables.

Overall, the trend in the activity ratios of Silicon Laboratories Inc suggests varying levels of efficiency in managing inventory, collecting receivables, and paying suppliers over the years. It is essential for the company to monitor and optimize these ratios to maintain healthy working capital management and overall financial health.

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Long-term

Long-term activity ratios provide insights into how efficiently a company is utilizing its assets.

1. Fixed Asset Turnover:
- Silicon Laboratories Inc's fixed asset turnover has shown a consistently increasing trend from 3.76 in 2020 to 4.42 in 2024. This indicates that the company has been able to generate more revenue relative to its investment in fixed assets over the years. A higher fixed asset turnover ratio suggests better asset utilization and operational efficiency.

2. Total Asset Turnover:
- The total asset turnover ratio for Silicon Laboratories Inc fluctuated over the years, from 0.26 in 2020 to 0.48 in 2024. Despite some variability, the overall trend shows an improvement in asset utilization efficiency. An increasing total asset turnover ratio signifies that the company is generating more sales for each dollar invested in total assets.

In summary, Silicon Laboratories Inc has shown improvements in both fixed asset turnover and total asset turnover ratios over the years. These ratios indicate that the company has been effectively utilizing its assets to generate revenue, reflecting operational efficiency and potentially sustainable growth.