Semtech Corporation (SMTC)

Short-term

Turnover ratios

Inventory Turnover:
The inventory turnover ratio measures how efficiently a company manages its inventory by showing how many times the company sells and replaces its inventory during a period. Semtech Corporation's inventory turnover ratio has fluctuated over the past few years, ranging from a low of 2.40 to a high of 6.11. The average inventory turnover ratio for the period under review is around 3.81, which indicates that Semtech is managing its inventory reasonably well.

Receivables Turnover:
The receivables turnover ratio reflects how efficient a company is at collecting cash from its credit sales. Semtech Corporation's receivables turnover data shows that the company did not report receivables turnover for most periods, indicating a lack of transparency in this area. However, in periods where data is available, the receivables turnover ratio ranged from 4.15 to 5.82, suggesting that Semtech collects its receivables within a reasonable time frame.

Payables Turnover:
The payables turnover ratio demonstrates how quickly a company pays off its creditors. Semtech Corporation's payables turnover data also lacks consistency, with no reported data for most periods. However, in periods with available data, the payables turnover ratio ranged from 4.96 to 19.66. A higher payables turnover ratio suggests that Semtech is paying off its suppliers more quickly, which could indicate strong cash flow management.

Working Capital Turnover:
The working capital turnover ratio measures the efficiency of a company in generating sales revenue from its working capital. Semtech Corporation's working capital turnover ratio has varied over the years, with values ranging from 1.10 to 3.01. The average working capital turnover ratio for the period analyzed is approximately 2.20, indicating that Semtech generates sales efficiently from its working capital.

Overall, the analysis of Semtech Corporation's activity ratios suggests that the company is managing its inventory reasonably well and demonstrating efficiency in generating sales revenue relative to its working capital. However, the lack of consistent data for receivables and payables turnover ratios may indicate a need for greater transparency in these areas to provide a more comprehensive assessment of the company's financial performance.

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Average number of days

Semtech Corporation's activity ratios reveal important insights into its operational efficiency.

1. Days of Inventory on Hand (DOH): The trend in DOH shows fluctuations over the periods analyzed. At the beginning of the time series, DOH was around 115 days, increased to almost 152 days by January 31, 2023, which is a concerning level, indicating excess inventory relative to sales. Subsequently, there was a significant improvement, with DOH dropping to around 60 days by January 28, 2024, suggesting better inventory management. However, by October 31, 2024, DOH increased again to approximately 137 days, warranting attention to inventory control.

2. Days of Sales Outstanding (DSO): DSO data shows a mixed picture with incomplete information for many periods. DSO was 34.68 days on January 30, 2022, and then jumped to 87.98 days by January 29, 2023. Such a large increase may indicate challenges in collecting receivables efficiently. The data gaps make it difficult to assess the trend accurately.

3. Number of Days of Payables: Payables data is also incomplete for many periods, hindering a comprehensive analysis. The available information shows a decrease in days of payables from 51.11 days on January 30, 2022, to 18.56 days by January 28, 2024. This suggests that Semtech Corporation was able to delay payments to suppliers, potentially improving cash flow during this period.

Overall, these activity ratios highlight fluctuations in Semtech Corporation's efficiency in managing its inventory, receivables, and payables. Further analysis of complete data would provide a more detailed understanding of the company's operational performance and liquidity management.

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Long-term

Semtech Corporation's fixed asset turnover ratio has shown varying performance over the years, ranging from a high of 5.86 to a low of 4.27. This ratio measures how efficiently the company is utilizing its fixed assets to generate revenue. The trend in the ratio indicates that Semtech has been able to generate reasonable revenue relative to its investment in fixed assets, although there are fluctuations over time. The company's ability to effectively use its fixed assets in revenue generation is critical for long-term sustainability and profitability.

On the other hand, Semtech's total asset turnover ratio has also shown fluctuations, with values ranging from 0.27 to 0.70. This ratio reflects how efficiently the company is generating sales from all its assets. The decreasing trend in this ratio over the years may suggest that Semtech has been less effective in utilizing all its assets to generate sales revenue. In order to improve profitability and operational efficiency, the company may need to focus on optimizing the use of all its assets, not just fixed assets.

Overall, the analysis of Semtech Corporation's long-term activity ratios indicates the need for the company to closely monitor and improve its asset utilization efficiency to drive sustainable growth and profitability in the long run.