Sandisk Corp (SNDK)

Short-term

Turnover ratios

The analysis of Sandisk Corp’s activity ratios over the period under review reveals notable trends in inventory turnover, receivables turnover, payables turnover, and working capital turnover, indicative of the company's operational efficiency and management practices.

Inventory Turnover:
The inventory turnover ratio demonstrated a declining trend from 4.09 times at the end of 2015 to 2.49 times by June 30, 2023. A decreasing trend suggests a lengthening of the average inventory holding period, implying potential challenges in inventory management or shifts in sales velocity. However, there was an improvement in this ratio to 2.86 times by June 30, 2024, indicating a partial recovery in inventory management efficiency, before it slightly declined to 2.47 times in June 2025.

Receivables Turnover:
Data for receivables turnover was not available as of December 31, 2015. From June 30, 2022 onward, the ratio increased significantly from 7.57 to a peak of 11.29 at June 30, 2023, suggesting heightened efficiency in collection processes and stronger management of receivables during this period. Subsequently, the ratio declined to 7.13 in June 2024 and further marginally decreased to 6.89 in June 2025, indicating a potential softening in receivables collection efficiency or changes in credit policies.

Payables Turnover:
The payables turnover ratio increased from 8.26 in June 2022 to 9.04 in June 2023, reflecting an improvement in the company's ability to pay its suppliers more rapidly. This upward trend continued markedly to 14.05 by June 2025, which could indicate a strategic shift toward paying suppliers more promptly, or improved liquidity positioning allowing the company to settle payables more quickly. It may also imply a reduction in credit terms negotiated with suppliers.

Working Capital Turnover:
The working capital turnover ratio improved from 1.52 in December 2015 to around 4.94 and 4.96 in June 2022 and 2023, reflecting more efficient use of working capital to generate sales. However, the ratio declined in the subsequent periods, falling to 4.68 in June 2024 and further to 2.01 in June 2025. This downward trend suggests a decrease in the efficiency of working capital utilization, possibly due to increased inventories or receivables, or a strategic reduction in operational scale.

Summary:
Overall, Sandisk Corp’s activity ratios depict a period of operational adjustment. The inventory turnover and working capital ratios have experienced declines, possibly signaling extended inventory holding periods and reduced efficiency in working capital management. Meanwhile, the receivables turnover initially improved but later softened, while payables turnover increased significantly, indicating a shift towards faster payments to suppliers. These dynamics could reflect changes in operational focus, supply chain strategies, or market conditions affecting the company's asset management practices.

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Average number of days

The activity ratios of Sandisk Corp, as reflected through specific operational efficiency metrics, exhibit notable variability over the analyzed periods.

The Days of Inventory on Hand (DOH) demonstrate an increasing trend, rising from approximately 89.31 days at the end of 2015 to a peak of 146.43 days as of June 30, 2023. Although there is a subsequent decrease to 127.63 days by June 30, 2024, the ratio remains significantly elevated compared to the 2015 baseline. This pattern suggests a substantial elongation in inventory holding periods over the years, indicating either inventory build-up or a strategic shift towards maintaining higher inventory levels.

The Days of Sales Outstanding (DSO), which measure the average collection period for receivables, saw a marked reduction from an unspecified prior value in 2015 to 48.24 days by mid-2022, further decreasing to 32.33 days in 2023. This decline signifies improved receivables management and faster cash collection processes over this period. However, the DSO slightly increased again to 51.22 days in 2024 and marginally to 53.00 days in 2025, implying potential easing in collection efficiency or changes in credit policies.

The Number of Days of Payables reflects the period the company takes to settle its obligations. From 44.18 days in June 2022, there is a gradual decrease to 40.40 days in 2023, followed by a slight increase to 43.74 days in 2024. A significant narrowing occurs by June 2025, when payables are settled in approximately 25.98 days. The overall trend indicates a tendency towards shortening the payables cycle, especially evident in 2025, which might reflect changing supplier terms or a deliberate effort to accelerate payments.

In summary, the activity ratios point to evolving operational strategies within Sandisk Corp. Inventory levels have increased substantially, potentially impacting liquidity and carrying costs. Receivables management has improved markedly but shows signs of slight slackening, while payables management has generally become more aggressive, particularly in the most recent period. These fluctuations collectively underscore shifts in operational efficiency and liquidity management within the company over the analyzed timeframe.

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Long-term

The analysis of Sandisk Corp’s long-term activity ratios reveals several key insights into the company’s operational efficiency over the specified period.

Regarding the fixed asset turnover ratio, data is available only for December 31, 2015, indicating a value of 6.81. The absence of data for subsequent periods from June 30, 2022, through June 30, 2025, suggests a lack of updated information, which limits the ability to assess trends or changes in the company's utilization of fixed assets over time.

In contrast, the total asset turnover ratio demonstrates a relatively stable pattern with slight fluctuations from 2015 through 2025. Specifically, the ratio slightly increased from 0.60 in December 2015 to 0.62 as of June 30, 2022. However, a decline is observed in the subsequent period, reaching 0.44 by June 30, 2023, indicating a decrease in the company's overall efficiency in generating sales from its total asset base during this timeframe. Subsequent projections show a recovery trend, with the ratio increasing to 0.49 by June 30, 2024, and further to 0.57 by June 30, 2025, suggesting a gradual improvement in asset utilization efficiencies.

Overall, the available data indicates that while fixed asset efficiency cannot be assessed beyond 2015, the total asset turnover ratio experienced a dip after 2022 but appears to be recovering in recent periods. This pattern may reflect adjustments in the company's operational strategies or asset management practices to enhance sales generation relative to asset holdings.