Skyworks Solutions Inc (SWKS)
Activity ratios
Short-term
Turnover ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.13 | 2.38 | 3.21 | 3.53 | 2.55 |
| Receivables turnover | 8.21 | 5.52 | 4.97 | 6.74 | 9.36 |
| Payables turnover | 14.30 | 16.74 | 14.18 | 13.25 | 9.07 |
| Working capital turnover | 1.53 | 2.15 | 2.71 | 2.31 | 1.80 |
The activity ratios of Skyworks Solutions Inc have shown fluctuations over the past five years.
1. Inventory turnover: This ratio measures how efficiently the company manages its inventory. Skyworks Solutions Inc has shown an improvement in managing its inventory over the years, with the ratio increasing from 2.55 in 2020 to 3.13 in 2024. This indicates that the company is turning over its inventory more frequently, which can be a positive sign in terms of managing costs and avoiding obsolete inventory.
2. Receivables turnover: This ratio indicates how efficiently the company collects payments from its customers. Skyworks Solutions Inc has shown fluctuations in this ratio over the years, with a peak of 9.36 in 2020 and a low of 4.97 in 2022. A higher receivables turnover ratio signifies faster collection of receivables, which can positively impact the company's cash flow and liquidity.
3. Payables turnover: This ratio measures how quickly the company pays its suppliers. Skyworks Solutions Inc has shown a decreasing trend in payables turnover ratio from 16.74 in 2023 to 14.30 in 2024. A lower payables turnover ratio may indicate that the company is taking a longer time to pay its suppliers, which can have implications for supplier relationships and cash management.
4. Working capital turnover: This ratio assesses how efficiently the company utilizes its working capital to generate sales. Skyworks Solutions Inc has shown fluctuations in this ratio over the years, with a peak of 2.71 in 2022 and a low of 1.53 in 2024. A higher working capital turnover ratio indicates that the company is efficient in utilizing its working capital to generate revenue.
Overall, it is important for Skyworks Solutions Inc to analyze these activity ratios in conjunction with other financial metrics to get a comprehensive understanding of its operational efficiency and liquidity management. Fluctuations in these ratios could provide insights into the company's financial health and performance trends over time.
Average number of days
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 116.58 | 153.35 | 113.81 | 103.32 | 142.98 |
| Days of sales outstanding (DSO) | days | 44.45 | 66.10 | 73.43 | 54.17 | 38.99 |
| Number of days of payables | days | 25.52 | 21.80 | 25.75 | 27.55 | 40.25 |
Skyworks Solutions Inc's activity ratios provide insights into how efficiently the company manages its inventory, receivables, and payables.
1. Days of Inventory on Hand (DOH): The trend in DOH indicates the number of days it takes for Skyworks Solutions to sell its inventory. A lower DOH is generally preferred as it signifies efficient inventory management. Skyworks Solutions has seen fluctuations in its DOH over the past five years, with a significant decrease in 2021 followed by an increase in 2023. The latest figure for 2024 shows a moderate improvement in managing inventory compared to the previous year.
2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect revenue from credit sales. A lower DSO is desirable as it indicates prompt collection of receivables. Skyworks Solutions has shown variability in its DSO, with a significant increase in 2023 followed by a decrease in 2024. The latest figure for 2024 shows a more favorable trend, indicating an improvement in collecting receivables efficiently.
3. Number of Days of Payables: This ratio reflects the average number of days the company takes to pay its suppliers. A higher number of days indicates that the company is taking longer to settle its payables, which can sometimes imply favorable credit terms. Skyworks Solutions has experienced fluctuations in its payables days over the past five years, with a decrease in 2021 and subsequent increase in 2023. The latest figure for 2024 shows a slight increase in the number of days of payables compared to the previous year.
In conclusion, Skyworks Solutions Inc should aim to continue improving its inventory turnover, collection of receivables, and management of payables to enhance operational efficiency and optimize cash flow.
Long-term
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.26 | 3.43 | 3.39 | 3.39 | 2.69 |
| Total asset turnover | 0.50 | 0.57 | 0.61 | 0.59 | 0.66 |
Skyworks Solutions Inc's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate sales revenue.
1. Fixed Asset Turnover:
- From 2020 to 2024, the fixed asset turnover ratio has shown fluctuations but generally trended upwards.
- The ratio measures how effectively the company is using its fixed assets to generate sales. In 2024, the ratio decreased slightly to 3.26 from 3.43 in 2023, indicating that each dollar invested in fixed assets generated $3.26 in sales. This may suggest a slight decrease in efficiency in utilizing fixed assets to generate revenue.
2. Total Asset Turnover:
- The total asset turnover ratio decreased from 0.66 in 2020 to 0.50 in 2024, showing a declining trend over the years.
- This ratio reflects the company's ability to generate sales relative to its total assets. The decreasing trend may indicate inefficiencies in asset utilization, as each dollar of total assets only generated $0.50 in sales revenue in 2024.
Overall, while the fixed asset turnover ratio has shown mixed trends, the declining trend in the total asset turnover ratio implies that Skyworks Solutions Inc may be becoming less efficient in utilizing both fixed and total assets to generate sales revenue over the years. This could warrant further analysis to identify areas for improvement in asset management and operational efficiency.