Semtech Corporation (SMTC)

Short-term

Turnover ratios

1. Inventory turnover: Semtech Corporation's inventory turnover ratio has shown a generally increasing trend over the past few quarters, indicating that the company is managing its inventory more efficiently. A higher ratio suggests that the company is selling its inventory more quickly, which can lead to lower storage costs and potentially higher profitability.

2. Receivables turnover: The receivables turnover ratio for Semtech Corporation has fluctuated over the periods provided. A declining ratio may signal potential issues with collecting receivables efficiently, while an increasing ratio could indicate improvements in the company's credit and collection policies.

3. Payables turnover: Semtech Corporation's payables turnover ratio has varied over the quarters, but it generally shows that the company is able to pay its suppliers relatively quickly. A higher payables turnover ratio may suggest that the company is effectively managing its accounts payable, possibly by negotiating favorable credit terms with suppliers.

4. Working capital turnover: The working capital turnover ratio for Semtech Corporation has fluctuated over the periods provided, but it generally indicates the company's efficiency in generating revenue relative to its working capital. A higher ratio implies that the company is generating more revenue from its working capital, which can be a positive sign of efficient capital utilization.

Overall, analyzing these activity ratios provides insights into Semtech Corporation's operational efficiency, inventory management, receivables collection, payables management, and utilization of working capital to generate revenue.

---

Average number of days

Days of inventory on hand (DOH) measures how efficiently a company manages its inventory. A decreasing trend in DOH indicates an improvement in inventory management as the company holds less inventory for a shorter time, which can free up cash and reduce carrying costs. Semtech Corporation's DOH has varied over the periods, with fluctuations between 39.62 days and 126.04 days. The higher values suggest that in some periods, Semtech may have had excess inventory, which could lead to increased storage costs and potential obsolescence risks.

Days of sales outstanding (DSO) reflects the average number of days it takes for a company to collect revenue after a sale is made. A decreasing trend in DSO indicates faster collection of receivables and better liquidity. Semtech's DSO has fluctuated between 32.04 days and 83.30 days over the periods, indicating varying efficiency in collecting payments from customers. Lower DSO values are generally better, as they show that the company is collecting cash more quickly.

Number of days of payables shows how long a company takes to pay its suppliers. An increasing trend in this ratio might suggest that a company is taking longer to settle its payables, which can have advantages in terms of cash flow management. Semtech's number of days of payables has ranged from 12.31 days to 61.09 days, indicating fluctuations in the company's payment practices. Higher values can indicate that Semtech is taking advantage of extended payment terms provided by suppliers, which can help preserve cash.

In summary, an ideal situation for Semtech would involve decreasing DOH and DSO ratios, indicating efficient inventory management and quicker cash collection, while potentially maintaining a reasonable number of days of payables to optimize cash flow management. Monitoring and managing these ratios can provide insights into the company's operational efficiency and financial health.

---

Long-term

The fixed asset turnover ratio for Semtech Corporation has shown some fluctuations over the past few periods, ranging from a low of 4.32 to a high of 8.69. This ratio measures the efficiency of the company in generating revenue from its investment in fixed assets. A higher fixed asset turnover ratio indicates that the company is utilizing its fixed assets more efficiently to generate sales.

On the other hand, the total asset turnover ratio has also fluctuated over the same periods, from a low of 0.30 to a high of 1.04. This ratio measures how efficiently the company is generating revenue from its total assets. A higher total asset turnover ratio suggests that the company is generating more sales relative to its total assets.

Overall, the fixed asset turnover ratio for Semtech Corporation has generally been on an upward trend, indicating improved efficiency in utilizing fixed assets to generate revenue. In contrast, the total asset turnover ratio has shown some variability but generally remains within a reasonable range.

It is important for Semtech Corporation to continuously monitor and analyze these long-term activity ratios to ensure optimal utilization of its assets and to drive sustainable revenue growth.