Synaptics Incorporated (SYNA)

Short-term

Turnover ratios

The activity ratios of Synaptics Incorporated from June 30, 2021, to June 30, 2025, exhibit notable trends and fluctuations across inventory turnover, receivables turnover, payables turnover, and working capital turnover.

Inventory Turnover: The ratio demonstrates a declining trend over the four-year period, decreasing from 8.88 in 2021 to 4.26 in 2025. This suggests a gradual reduction in how many times inventory is sold and replaced within the fiscal year, potentially indicating slower inventory movement or changes in inventory management efficiency.

Receivables Turnover: The ratio shows a variable pattern, initially decreasing from 5.87 in 2021 to 5.38 in 2022, then significantly increasing to 8.20 in 2023 before declining again to 6.68 in 2024 and slightly rising to 8.24 in 2025. These fluctuations reflect shifts in the company's management of receivables and collection efficiency, with notable improvement observed in 2023 and 2025.

Payables Turnover: This ratio exhibits considerable variation, with a decline from 7.46 in 2021 to 5.62 in 2022, a sharp spike to 13.96 in 2023, followed by a decrease to 5.94 in 2024 and a marginal increase to 6.03 in 2025. The spike in 2023 indicates an exceptionally rapid payment cycle, possibly reflecting changes in supplier relations or payment terms, while the subsequent decrease suggests a reversal or stabilization.

Working Capital Turnover: The ratio shows a downward trend from 3.41 in 2021 through 2023, reaching 1.34, but then rebounds to 1.08 in 2024 and increases again to 2.23 in 2025. This pattern indicates fluctuating efficiency in utilizing working capital to generate sales, with a notable improvement in 2025 aligning with a recovery from earlier slower periods.

Overall, the data indicates that Synaptics has experienced variability in its operational efficiency related to inventory, receivables, payables, and working capital management. The declining inventory turnover suggests slower inventory management, while the fluctuating receivables and payables ratios reflect changes in credit and payment practices. The recent recovery in working capital turnover points toward some improvement in operational efficiency in 2025.

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Average number of days

The analysis of Synaptics Incorporated's activity ratios over the period from June 30, 2021, to June 30, 2025, reveals notable trends and shifts in operational efficiency.

Days of Inventory on Hand (DOH):
There has been a consistent increase in the number of days inventory is held, rising from approximately 41.09 days in 2021 to 85.73 days in 2025. This nearly doubling indicates a gradual elongation in inventory holding periods, potentially reflecting inventory buildup, slower movement of stock, or strategic shifts in inventory management. The increasing DOH suggests the company is taking longer to convert inventory into sales, which may have implications for working capital and inventory carrying costs.

Days of Sales Outstanding (DSO):
The receivables collection period exhibits fluctuations over the period. It increased from 62.20 days in 2021 to a peak of 67.83 days in 2022, suggesting a lengthening of the credit collection cycle during that year. Subsequently, the DSO saw a significant reduction to 44.50 days in 2023, reflecting improved receivables management or more stringent credit policies. However, there was a subsequent rise to 54.63 days in 2024, before reverting to approximately 44.27 days in 2025, nearing the 2023 level. This pattern indicates periods of both lengthening and shortening of receivables collection times, possibly driven by changing credit terms, customer mix, or collection efforts.

Number of Days of Payables:
Synaptics' payable period has shown substantial variability. It increased from 48.91 days in 2021 to a peak of 64.97 days in 2022, indicating extended credit periods negotiated with suppliers or delayed payments. Conversely, it sharply contracted to 26.15 days in 2023, suggesting a strategic move to pay suppliers more quickly or a change in payables terms. The payable days then increased again to approximately 61.47 days in 2024 and slightly decreased to 60.54 days in 2025, maintaining a relatively extended payables period compared to 2021 but shorter than 2022.

Summary of Implications:
The overall trend indicates an elongation of inventory holding periods and variability in receivables collection times. The increasing DOH values could be a sign of inventory accumulation or strategic staging, potentially affecting liquidity and increasing carrying costs. The fluctuations in DSO demonstrate variability in receivables management, with periods of improved collection efficiently reducing days outstanding. Payables periods fluctuate significantly, reflecting strategic negotiations or adjustments in payment policies; the elongation post-2023 suggests efforts to optimize cash flow by delaying payments, whereas the sharp decrease in 2023 shows a temporary shift towards earlier payments.

Overall, these activity ratios suggest a strategic tightening and loosening of working capital management practices over the assessed period, with potential implications for liquidity, operational efficiency, and cash flow management.

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Long-term

The analysis of Synaptics Incorporated’s long-term activity ratios reveals several notable trends.

The Fixed Asset Turnover ratio experienced a significant increase from 14.69 in June 2021 to 27.66 in June 2022, indicating a substantial improvement in the efficiency with which fixed assets were utilized to generate sales. However, this ratio declined to 20.41 in June 2023, suggesting a reduction in fixed asset utilization efficiency, though it remained substantially higher than the 2021 level.

The Total Asset Turnover ratio remained relatively stable between June 2021 and June 2022, with marginal increases from 0.60 to 0.61, reflecting consistent overall asset utilization efficiency during that period. However, a noticeable decline occurred in June 2023, with the ratio decreasing to 0.52, indicating less efficient use of total assets to generate sales. This downward trend continued into the projected figures for June 2024, where the ratio drops further to 0.34, and then shows a modest recovery to 0.42 in June 2025.

Overall, these patterns suggest that while Synaptics experienced a period of enhanced fixed asset efficiency during 2022, this trend did not sustain through 2023 and the subsequent years. The total asset turnover ratios indicate a general decline in asset efficiency over the observed period, with some signs of partial recovery forecasted for mid-2025. This overall decline may reflect strategic shifts, asset base changes, or operational adjustments impacting the company’s ability to efficiently deploy its assets for revenue generation over the forecast horizon.