Seagate Technology PLC (STX)
Activity ratios
Short-term
Turnover ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 4.39 | 5.82 | 5.61 | 6.90 | 7.17 |
| Receivables turnover | 11.48 | 9.37 | 7.61 | 9.22 | 9.43 |
| Payables turnover | 3.05 | 4.14 | 4.26 | 4.81 | 4.53 |
| Working capital turnover | 26.57 | 23.59 | 24.40 | 12.45 | 7.55 |
Seagate Technology PLC's inventory turnover has declined from 7.17 in 2020 to 4.39 in 2024, indicating that the company is selling its inventory at a slower rate in recent years. This may suggest potential issues with inventory management or a change in demand for Seagate's products.
The receivables turnover ratio has shown an increasing trend over the years, growing from 9.43 in 2020 to 11.48 in 2024. This reflects that Seagate is collecting its accounts receivable more efficiently, possibly due to improved credit policies or more timely collection practices.
On the other hand, Seagate's payables turnover has decreased from 4.53 in 2020 to 3.05 in 2024. This decline may indicate that the company is taking longer to pay its suppliers, which could lead to strained supplier relationships or potential liquidity challenges.
Seagate's working capital turnover has demonstrated a significant improvement over the years, increasing from 7.55 in 2020 to 26.57 in 2024. This suggests that the company is generating more revenue relative to its working capital, which is a positive indication of operational efficiency and effective utilization of resources.
Overall, while Seagate's inventory turnover and payables turnover have shown decreasing trends, the increasing receivables turnover and significantly improved working capital turnover point towards a positive development in the efficiency of Seagate's operational activities.
Average number of days
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 83.06 | 62.71 | 65.10 | 52.93 | 50.88 |
| Days of sales outstanding (DSO) | days | 31.78 | 38.95 | 47.95 | 39.57 | 38.73 |
| Number of days of payables | days | 119.72 | 88.18 | 85.61 | 75.83 | 80.55 |
Seagate Technology PLC's activity ratios provide insights into the efficiency of the company's operations in managing inventory, collecting receivables, and paying its suppliers.
Over the years, there has been an increasing trend in the Days of Inventory on Hand (DOH) metric, suggesting that the company is holding onto inventory for a longer period before selling it. This could indicate potential issues with inventory management or declining demand for Seagate's products.
The Days of Sales Outstanding (DSO) metric has shown a fluctuating pattern, with a dip in 2024 compared to the previous year. A lower DSO indicates that the company is collecting receivables more quickly, which is a positive sign of efficient credit control practices.
On the other hand, the Number of Days of Payables has been increasing steadily, indicating that Seagate is taking more time to pay its suppliers. While this could benefit the company by preserving cash flow, it may also strain relationships with suppliers if payment terms are extended too far.
Overall, Seagate Technology PLC's activity ratios suggest that there may be room for improvement in managing inventory levels and payables while maintaining efficient collections on receivables.
Long-term
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.84 | 4.33 | 5.21 | 4.90 | 4.94 |
| Total asset turnover | 0.80 | 0.98 | 1.30 | 1.23 | 1.18 |
Seagate Technology PLC's fixed asset turnover has shown a declining trend over the past five years, falling from 4.94 in 2020 to 3.84 in 2024. This indicates that the company is generating less revenue per dollar of fixed assets invested, which could imply inefficiencies in asset utilization or decreased sales performance.
Similarly, the total asset turnover ratio has also decreased consistently over the same period, from 1.18 in 2020 to 0.80 in 2024. This declining trend suggests that Seagate is generating lower revenue relative to its total assets, which could be a sign of decreased operational efficiency or overall sales performance.
Overall, the decreasing trend in both fixed asset turnover and total asset turnover ratios indicates potential challenges in effectively utilizing assets to generate revenue, which may need further investigation to identify and address underlying issues impacting the company's long-term activity efficiency.