Semtech Corporation (SMTC)

Short-term

Turnover ratios

Based on the data provided, let's analyze the activity ratios of Semtech Corporation:

1. Inventory Turnover:
- Inventory turnover measures how efficiently a company manages its inventory. A higher ratio indicates that the company is selling inventory more quickly.
- Semtech's inventory turnover has experienced fluctuations over the years. It increased significantly from 1.34 in January 31, 2023, to 11.76 in January 28, 2024, before decreasing to 2.77 in January 31, 2025.
- The spike in inventory turnover in January 28, 2024, could be a sign of better inventory management or increased sales efficiency during that period.

2. Receivables Turnover:
- Receivables turnover measures how efficiently a company collects payments from its customers. A higher ratio indicates faster collection of receivables.
- Semtech's receivables turnover shows some missing data points, with values provided for only a few periods. The available data indicates fluctuations in the turnover ratio over time.
- The trend of missing values in some years may suggest varying collection practices or changes in customer payment behavior.

3. Payables Turnover:
- Payables turnover measures how quickly a company pays its suppliers. A higher ratio signifies that the company is paying its suppliers more quickly.
- In the data provided, Semtech has missing values for payables turnover for most periods, with available data showing a significant increase from 5.97 in January 29, 2023, to 37.86 in January 28, 2024.
- The notable increase in payables turnover in January 28, 2024, may indicate a change in the company's payment terms or improved supplier relationships during that period.

4. Working Capital Turnover:
- Working capital turnover reflects the efficiency of a company in generating revenue from its working capital. A higher ratio suggests effective utilization of working capital.
- Semtech's working capital turnover has been relatively stable over the years, with a slight increasing trend from 2.34 in January 29, 2023, to 3.01 in January 31, 2025.
- The consistent improvement in working capital turnover indicates that Semtech is efficiently using its working capital to support its operations and generate revenue.

In summary, while the activity ratios of Semtech Corporation exhibit fluctuations and missing data points, the trends suggest varying efficiency levels in managing inventory, receivables, payables, and working capital over the analyzed periods. Careful monitoring and analysis of these ratios can provide insights into the company's operational performance and efficiency in managing its resources.

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Average number of days

To analyze Semtech Corporation's activity ratios, we will focus on three key metrics: Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Number of Days of Payables.

1. Days of Inventory on Hand (DOH):
- In January 2023, Semtech Corporation had 126.12 days of inventory on hand, indicative of a relatively moderate inventory turnover.
- By January 2024, the DOH significantly improved to 31.02 days, suggesting a more efficient management of inventory levels.
- However, by January 2025, the DOH increased to 131.89 days, indicating a potential slowdown in inventory turnover which may require closer scrutiny.

2. Days of Sales Outstanding (DSO):
- In January 2023, the Days of Sales Outstanding stood at 83.32 days, reflecting the average number of days it takes for Semtech to collect revenue from sales.
- It is noted that no data was available for DSO in January 2023 and 2024, suggesting a lack of visibility on the company's collection efficiency during those periods.

3. Number of Days of Payables:
- Semtech had 61.13 days of payables in January 2023, indicating the average number of days it takes the company to pay its suppliers.
- The observation that no data was provided for the Number of Days of Payables in January 2023 and 2024 indicates a potential lack of information on the company's payment cycle during those periods.
- It improved significantly to 9.64 days by January 2024, potentially indicating more favorable payment terms with suppliers.

Overall, the analysis of Semtech Corporation's activity ratios suggests fluctuations in inventory turnover efficiency, collection processes, and payment cycles over the periods examined. The company may need to focus on optimizing its inventory levels, enhancing collection procedures, and maintaining efficient relationships with suppliers to improve its overall operational performance.

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Long-term

Semtech Corporation's fixed asset turnover ratio indicates the efficiency with which the company generates revenue using its fixed assets. The company's fixed asset turnover was 4.51 in January 29, 2023, increased to 5.03 in January 28, 2024, and was not available for January 31, 2023 and January 31, 2024. The upward trend in the fixed asset turnover ratio suggests that Semtech is getting better at generating revenue from its fixed assets over time.

Total asset turnover ratio, on the other hand, measures Semtech's ability to generate sales in relation to its total assets. The company's total asset turnover was 0.30 in January 29, 2023, remained relatively stable at 0.29 in January 31, 2023, then showed a significant improvement to 0.56 in January 28, 2024, further increasing to 0.63 in January 31, 2024, and reaching 0.64 in January 31, 2025. This indicates that Semtech has been more effective in utilizing its total assets to generate sales, with a consistent upward trend in the total asset turnover ratio over the years.

Overall, the increasing trends in both fixed asset turnover and total asset turnover ratios reflect Semtech Corporation's improving efficiency in utilizing its assets to drive revenue generation and indicate positive performance in the long-term activity aspect of the company.