Synopsys Inc (SNPS)

Activity ratios

Short-term

Turnover ratios

	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Inventory turnover	3.58	3.24	3.23	3.06	3.46	3.80	4.24	4.94	5.02	4.62	4.45	4.28	3.76	3.53	3.65	3.51	4.13	4.71	4.49	5.09
Receivables turnover	6.40	7.74	7.41	5.76	5.80	8.29	6.78	5.00	6.03	7.25	6.58	4.34	6.96	7.06	6.51	4.84	4.43	5.50	5.36	4.22
Payables turnover	6.25	15.95	13.24	15.24	7.28	16.16	12.87	15.53	28.30	14.11	12.75	31.19	31.44	20.62	19.02	31.91	26.49	20.28	14.42	28.33
Working capital turnover	1.64	2.40	2.89	8.03	13.12	10.27	12.83	17.05	21.34	14.02	7.78	9.47	10.65	9.50	9.18	16.88	9.00	27.06	—	—

Synopsys Inc's activity ratios provide insight into the efficiency of the company's operational processes.

1. Inventory Turnover: Over the recent quarters, the inventory turnover ratio has ranged from 3.06 to 5.09, indicating that the company is selling its inventory approximately 3 to 5 times a year. The ratio has shown some fluctuations, suggesting changes in demand or inventory management practices.

2. Receivables Turnover: The receivables turnover ratio has varied from 4.34 to 8.29, demonstrating how many times the company collects its accounts receivable during a year. A higher turnover indicates efficient collections. The fluctuations may be due to credit policies or the creditworthiness of customers.

3. Payables Turnover: The payables turnover ratio has shown significant variability, ranging from 7.28 to 31.91. A higher ratio suggests that the company is paying its suppliers more frequently. The fluctuations could indicate changes in payment terms or supplier relationships.

4. Working Capital Turnover: The working capital turnover ratio has varied from 1.64 to 27.06, reflecting how efficiently the company generates sales from its working capital. Higher turnover ratios indicate better utilization of working capital. The significant fluctuations may indicate changes in operating efficiency or business cycles.

Overall, an analysis of Synopsys Inc's activity ratios suggests varying levels of efficiency in managing its assets, receivables, payables, and working capital over the quarters, which could be influenced by operational changes, market conditions, or strategic decisions.

Average number of days

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Days of inventory on hand (DOH)	days	101.97	112.48	112.84	119.38	105.60	95.95	86.14	73.89	72.72	78.96	82.08	85.33	97.00	103.34	100.02	104.07	88.34	77.48	81.38	71.77
Days of sales outstanding (DSO)	days	57.01	47.18	49.23	63.36	62.91	44.01	53.83	73.06	60.50	50.34	55.45	84.18	52.45	51.73	56.09	75.40	82.37	66.38	68.15	86.43
Number of days of payables	days	58.43	22.89	27.56	23.96	50.15	22.58	28.35	23.50	12.90	25.87	28.62	11.70	11.61	17.70	19.19	11.44	13.78	18.00	25.31	12.88

Synopsys Inc's activity ratios indicate the efficiency with which the company manages its inventory, receivables, and payables.

Days of Inventory on Hand (DOH) has been fluctuating over the periods, ranging from 71.77 days to 119.38 days. A higher number of days indicates that inventory is moving slowly, potentially tying up capital and increasing holding costs. Synopsys may need to focus on inventory management to avoid overstocking or obsolescence.

Days of Sales Outstanding (DSO) also show variability, ranging from 44.01 days to 84.18 days. A lower DSO implies faster collection of receivables, which is favorable for cash flow. The higher DSO periods may suggest that Synopsys needs to improve its credit policies or collection procedures to accelerate cash inflows.

The Number of Days of Payables fluctuates widely, from 11.44 days to 58.43 days. A longer payable period can indicate that Synopsys is effectively using trade credit to finance its operations, leading to potential liquidity advantages. However, extremely long payable periods could strain supplier relationships and impact creditworthiness.

Overall, Synopsys should aim to strike a balance in managing its activity ratios to optimize cash flow, enhance working capital efficiency, and maintain strong relationships with suppliers and customers.

Long-term

	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Fixed asset turnover	11.13	10.90	10.92	10.81	10.63	10.31	9.68	10.01	10.51	10.17	9.68	9.43	8.90	8.67	8.32	7.85	7.62	7.25	7.23	7.38
Total asset turnover	0.48	0.53	0.56	0.58	0.57	0.56	0.54	0.54	0.54	0.53	0.52	0.51	0.48	0.48	0.48	0.48	0.46	0.46	0.46	0.47

Synopsys Inc's fixed asset turnover has generally been increasing over the past few years, indicating that the company is generating more revenue relative to its investment in fixed assets. This improvement suggests better efficiency in utilizing its property, plant, and equipment for revenue generation.

On the other hand, the total asset turnover shows a fluctuating trend with a slight downward movement in recent periods. This ratio measures how effectively the company is using all its assets to generate revenue. The slight decline may signal challenges in optimizing the utilization of both fixed and current assets to drive sales.

Overall, while the fixed asset turnover indicates enhanced efficiency in utilizing fixed assets, there may be a need for Synopsys Inc to focus on maximizing the productivity of all its assets to improve its overall revenue generation capacity.