Super Micro Computer Inc (SMCI)

Short-term

Turnover ratios

The activity ratios of Super Micro Computer Inc. over the analyzed period present a comprehensive view of its operational efficiency, highlighting trends and fluctuations across key indicators.

Inventory Turnover: The ratio shows a fluctuating pattern from mid-2020 to early 2025. In the initial period, the turnover oscillates around 3.30 to 3.59, indicating a relatively stable but moderate frequency of inventory sales. Notably, from December 2022 onward, the ratio demonstrates an upward trend, reaching a peak of approximately 5.07 in December 2024, with some fluctuations thereafter. This increase suggests improved inventory management and more rapid inventory utilization in recent periods, possibly reflecting better demand fulfillment or inventory control strategies; however, the ratio's variability indicates some inconsistency in inventory turnover rates.

Receivables Turnover: This ratio exhibits notable fluctuations, starting from around 8.27 in June 2020, peaking above 10 in late 2020 and 2021, then declining sharply to below 6 in mid-2022. Subsequently, the ratio demonstrates a general upward trend, reaching approximately 8.74 by September 2023 but with some oscillations. The higher ratios in 2022 and 2023 suggest improved collection efficiency, reducing receivable collection periods, whereas lower values previously indicate slower collection cycles.

Payables Turnover: This ratio has experienced significant variability, with early periods averaging around 6 to 8.33, then notably declining to below 5 during parts of 2021 and re-escalating to exceptionally high levels in late 2024, peaking at over 33 in December 2024. Such fluctuations reflect changes in accounts payable management—either extending payment terms to suppliers during certain periods or rapidly settling accounts. The sharp increase in late 2024 may imply a temporary reduction in payable periods or changes in supplier credit policies.

Working Capital Turnover: This ratio indicates the efficiency of utilizing working capital to support sales. It generally ranges from approximately 1.86 to 4.09 over the period. A decreasing trend appears from late 2023 onwards, falling sharply below 2 in March 2024, which could suggest reduced efficiency in converting working capital into sales or increased working capital levels relative to sales activity. The subsequent partial recovery hints at some stabilization but remains below peak levels observed earlier.

Overall, the activity ratios reveal periods of operational improvement, notably in inventory and receivables management. The upward trend in inventory turnover in recent periods indicates better inventory utilization, while fluctuations in receivables and payables ratios reflect adjustments in credit and payment policies. The recent sharp increase in payables turnover signifies possible strategic changes in supplier payment practices, and the declining working capital turnover points to challenges or strategic shifts in resource utilization efficiencies.

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Average number of days

The activity ratios of Super Micro Computer Inc., specifically the days of inventory on hand (DOH), days of sales outstanding (DSO), and days of payables (DOP), demonstrate significant fluctuations over the analyzed period from June 2020 through March 2025.

Starting with the days of inventory on hand, there was an overall upward trend from 110.48 days in June 2020 to a peak of 146.00 days in March 2022, indicating inventory accumulation or slower inventory turnover during this period. A subsequent decline is observed, reaching a low of approximately 72.00 days at the end of 2024, reflecting improved inventory management and faster inventory turnover. Notably, the inventory days increased again to 151.57 days in March 2024 before declining to 73.81 days by March 2025, suggesting recent enhancements in inventory efficiency.

The days of sales outstanding (DSO) exhibited some volatility but generally remained in the mid-thirties to mid-fifties range. Initially, DSO decreased from 44.13 days in June 2020 to around 35.69 days in September 2020, indicating improved receivables collection efficiency early on. However, a rise to 58.84 days was observed in June 2023, possibly reflecting a period of extended credit terms or slow collections. Later, the DSO decreased to approximately 44.72 days in March 2025, implying a recent trend toward quicker receivables turnover.

The number of days of payables fluctuated notably over the period. It started at 54.19 days in June 2020, peaked at 73.94 days in June 2021, indicating extended supplier payment periods, and then declined sharply to as low as 11.00 days in December 2024. This sharp decrease suggests a trend of accelerating payments to suppliers in late 2024. The latest figure of 12.26 days in March 2025 indicates the company is settling its payables more rapidly than in previous periods.

Collectively, these activity ratios suggest that the company has experienced periods of inventory accumulation followed by improved inventory turnover. The receivables management has shown improvement recently, with shorter collection periods. The significant reduction in payable days towards the end of the period signals a shift toward quicker settlement of obligations, which could impact liquidity and working capital management strategies. Overall, the trends point to ongoing efforts to optimize operational efficiencies, although fluctuations indicate periods of strategic or operational adjustments.

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See also:

Super Micro Computer Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

The long-term activity ratios for Super Micro Computer Inc, specifically the Fixed Asset Turnover and Total Asset Turnover, demonstrate notable trends over the period from June 2020 through September 2023.

Fixed Asset Turnover: This ratio reflects the efficiency with which the company utilizes its fixed assets to generate sales. Starting at 12.96 on June 30, 2020, the ratio shows a steady upward trajectory, increasing to 13.65 by September 30, 2020, and gradually rising further over the subsequent periods. Notably, the ratio surpasses 20.00 during the later periods, reaching 22.98 on December 31, 2022, and continuing to improve to 24.54 by June 30, 2023. This trend indicates an increasing efficiency in leveraging fixed assets to generate revenue, possibly due to better asset management, technological upgrades, or operational improvements.

Total Asset Turnover: This ratio gauges the overall efficiency in using all assets to generate sales. From a value of 1.74 on June 30, 2020, the ratio experienced some fluctuations but generally trended upwards over time. It declined slightly to 1.58 by September 30, 2021, then rose significantly to 2.16 at the end of 2022. The ratio remained relatively stable around 2.00–2.14 through early 2023, reaching 2.01 by March 2024. The overall trend indicates enhanced utilization of total assets to generate revenue, suggesting increased operational efficiency and possibly a shift towards a more asset-light or optimized asset base.

In summary, the data reveals a consistent improvement in Super Micro Computer Inc's long-term efficiency ratios. The firm appears to be increasingly effective at converting its fixed assets and total assets into sales, reflecting improvements in asset management, operational performance, or business strategy over the analyzed period.

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See also:

Super Micro Computer Inc Long-term (Investment) Activity Ratios (Quarterly Data)