Semtech Corporation (SMTC)

Receivables turnover

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Jan 26, 2020
Revenue	US$ in thousands	772,240	763,171	735,908	589,413	538,320
Receivables	US$ in thousands	151,624	174,220	71,507	70,433	61,927
Receivables turnover		5.09	4.38	10.29	8.37	8.69

January 28, 2024 calculation

Receivables turnover = Revenue ÷ Receivables
= $772,240K ÷ $151,624K
= 5.09

The receivables turnover ratio for Semtech Corporation has fluctuated over the past five years. In the most recent fiscal year ending on January 28, 2024, the company's receivables turnover ratio was 5.09, indicating that on average, Semtech collected its accounts receivable approximately 5.09 times during the year. This represents a decrease from the previous fiscal year where the ratio was 4.38.

Comparing the current ratio to the historical trend, there was a notable drop from the exceptionally high ratio of 10.29 in January 30, 2022, suggesting a significant decrease in how quickly Semtech was collecting its receivables. However, the most recent ratio of 5.09 is closer to the ratios seen in the fiscal years 2021 and 2020, indicating a return to a more typical level of receivables turnover.

It is important to note that a higher receivables turnover ratio is generally preferable as it signifies that the company is collecting its outstanding accounts receivable more efficiently. However, the decrease in turnover from the unusually high level in fiscal year 2022 to the current level may warrant further investigation into the company's credit policies, collection processes, or changes in customer behavior that could be impacting the efficiency of receivables management.