Sandisk Corp (SNDK)

Short-term

Turnover ratios

The analysis of SanDisk Corp's activity ratios over the given period reveals several noteworthy trends:

Inventory Turnover:
The inventory turnover ratio demonstrates seasonal fluctuation with an overall upward trend from 4.42 on June 30, 2013, to a high point of 5.10 on December 31, 2014. This indicates periods of efficient inventory management during 2013–2014. However, post-2015, a declining pattern emerges, with values decreasing to 2.21 by December 31, 2024, and reaching 2.25 in March 2025. The reduction signifies a deterioration in inventory turnover efficiency, possibly reflecting increased inventory holdings, slower inventory movement, or changes in product demand dynamics.

Receivables Turnover:
The receivables turnover data starts from March 31, 2014, with values indicating active receivables collection, peaking at 7.92 on December 31, 2024. The ratios fluctuate within a range of approximately 6.49 to 7.92 in subsequent periods, suggesting a relatively stable collection efficiency, with slight improvements toward the end of the observed horizon. Higher receivables turnover rates indicate faster collection processes, positively impacting cash flow and liquidity; thus, the company's collection efficiency appears to have remained relatively consistent, with a tendency toward improvement in recent periods.

Payables Turnover:
Data on payables turnover span only from June 30, 2024, onward, showing a significant fluctuation. The ratio peaks at 15.66 on June 30, 2024, then declines sharply to 7.75 on September 30, 2024, before fluctuating again, reaching 6.71 in June 2025. This pattern suggests variability in the company's ability or willingness to pay its suppliers promptly. The initial high indicates a period of shorter credit terms or quicker payments, whereas the subsequent decline might reflect extended credit periods or strategic payment management.

Working Capital Turnover:
The working capital turnover ratios reveal a generally positive trend, with substantial increases observed in 2014–2015, reaching a peak of 3.88 on March 31, 2015. After this period, the ratio declines notably, falling below 2.00 in later quarters, with the latest value of 1.94 on March 31, 2025. The fluctuations suggest variations in how efficiently working capital is utilized to generate sales, with efficiency peaking around 2014–2015 and decreasing afterward.

Summary of Trend Implications:
- The declining inventory turnover indicates increasing inventory levels or slower movement of stock, which could potentially tie up capital and affect liquidity.
- The stabilized receivables turnover suggests consistent collection performance, supporting steady cash flows.
- Variability in payables turnover points to adjustments in payment strategies or supplier credit terms.
- Fluctuations in working capital turnover reflect changes in operational efficiency and resource utilization over time.

Collectively, these ratios depict a company experiencing shifts in operational efficiency, with initial improvements in the mid-2010s followed by periods of reduced activity efficiency or strategic shifts in managing inventories, receivables, and payables.

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Average number of days

The analysis of Sandisk Corp’s activity ratios, specifically the days of inventory on hand (DOH), days sales outstanding (DSO), and days of payables (DPO), reveals notable trends over the provided periods.

Days of Inventory on Hand (DOH):
Between June 30, 2013, and March 31, 2014, the DOH was relatively stable, fluctuating around the low to mid-80 days. There was a modest increase reaching approximately 96.20 days by March 31, 2016, indicating longer inventory holding periods during this period. Post-2016, the data subsequent to September 2015 is unavailable until June 30, 2024, where there is a significant rise to 127.63 days, continuing to increase to 150.23 days by September 30, 2024, and reaching approximately 165.40 days by December 31, 2024. The increase suggests a substantial accumulation of inventory, potentially reflecting supply chain adjustments, product mix changes, or inventory management strategies. In 2025, the DOH remains elevated, with values around 147.55 days, indicating that inventory levels remain high compared to earlier years.

Days Sales Outstanding (DSO):
Data on DSO is unavailable until June 30, 2024, when it stands at approximately 51.22 days. It slightly increases to about 53.97 days by September 2024, then decreases to 46.08 days at the end of 2024. However, in early 2025, DSO rises again to approximately 52.22 days and reaches 56.28 days by June 2025. These fluctuations suggest that the company's collection period has remained relatively stable in recent years, with slight variations indicating minor changes in receivables management or customer payment behaviors.

Days of Payables (DPO):
Prior to 2024, DPO data is largely unavailable. Starting in June 2024, DPO is approximately 23.31 days, increasing to 47.12 days by September 2024, and then stabilizing around 24.37 days at year-end 2024. Moving into 2025, DPO further increases to approximately 27.24 days in March and reaches 54.36 days by June 2025. The rising trend in DPO indicates a tendency to elongate the payable period, which could be a strategic effort to improve cash flow management, or reflect changes in payment terms negotiated with suppliers.

Overall Implications:
The prolonged inventory days suggest slower inventory turnover, which might be indicative of excess stock, shifts in product demand, or strategic inventory positioning. The relatively stable DSO indicates consistent receivables collection efficiency, whereas the increasing DPO points towards a deliberate extension of payment cycles to optimize liquidity. Collectively, these activity ratios imply Sandisk’s evolving operational and cash management strategies, with a focus on managing working capital by extending payables and holding increased inventory levels, particularly in recent periods.

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Long-term

The analysis of Sandisk Corp's long-term activity ratios, based on the provided data, reveals the following trends and insights:

1. Fixed Asset Turnover:
From June 30, 2013, to March 31, 2016, the fixed asset turnover ratio exhibited an upward trajectory, increasing from 8.35 to a peak of 9.99. This indicates that during this period, the company was efficiently utilizing its fixed assets to generate revenue, reflecting improved asset productivity.

However, after March 2016, the ratio declined steadily, reaching 6.81 by December 31, 2015, and slightly fluctuating before the data cutoff. The decline suggests reduced efficiency in using fixed assets to generate sales, which could be attributed to several factors such as asset underutilization, increased investment in fixed assets that have yet to generate proportionate revenue, or changes in operational focus.

2. Total Asset Turnover:
The total asset turnover ratio experienced relatively stable but modest improvements from 0.59 on June 30, 2013, to a high of 0.68 on March 31, 2015. This indicates that the company's ability to generate sales from its total assets improved during this period.

Post-2015, the ratio declined slightly, reaching a low of 0.49 on June 30, 2024. The slight downward trend reflects a decrease in overall asset efficiency in generating revenue, which could be due to increased asset base without corresponding proportional sales growth, or strategic shifts in asset utilization.

3. General Trends and Implications:
Overall, the data suggests that Sandisk's asset utilization efficiency improved in the early years up to 2015, particularly as reflected in the fixed asset turnover, but subsequently experienced a decline. This pattern may indicate a period of asset expansion or investment not immediately translating into sales efficiency, possibly due to market conditions, product lifecycle, or strategic adjustments.

The stability and gradual decline of total asset turnover ratios imply that the company’s ability to generate revenue from its overall asset base has diminished over time, potentially signaling increased capital intensity or operational challenges in maintaining previous levels of efficiency.

In conclusion, while Sandisk demonstrated strong asset utilization efficiency in the initial years, recent trends point toward decreasing effectiveness in leveraging assets to generate sales, warranting further operational and strategic analysis to understand underlying causes and potential corrective measures.