Synaptics Incorporated (SYNA)

Short-term

Turnover ratios

The activity ratios of Synaptics Incorporated from the provided data reveal several noteworthy trends and patterns over the analyzed period.

Inventory Turnover:
The inventory turnover ratio demonstrates an initial increase from 6.73 in September 2020 to a peak of 10.49 in March 2021, suggesting a period of effective inventory management and sales efficiency. Subsequently, the ratio declines gradually to 4.31 in December 2023, with minor fluctuations thereafter. This decreasing trend indicates that inventory is turning over less frequently, potentially reflecting increased inventory levels, longer production cycles, or shifts in sales dynamics. The stabilization around approximately 4.5 in the latest periods suggests a new equilibrium in inventory management.

Receivables Turnover:
Receivables turnover exhibits a general upward trend, rising from 5.81 in September 2020 to a high of 9.59 in September 2023. This indicates an improvement in the company's collection efficiency and a reduction in the average collection period, which can enhance liquidity. After reaching this peak, the ratio slightly declines but remains relatively high at around 7.87 as of March 2025, signaling sustained efficiency in receivables management.

Payables Turnover:
The payables turnover ratio shows considerable fluctuation over time. It starts at approximately 9.99 in September 2020, then hits a low of 5.18 in December 2021. From that point, there is a notable increase to a high of 13.96 in June 2023, implying that the company is paying its suppliers more quickly, which may reflect improved cash flow or changes in supplier terms. Post-peak, the ratio declines again to about 6.03-6.49 in the latest periods, indicating a moderation in payment pace, possibly balancing cash management with maintaining supplier relationships.

Working Capital Turnover:
The working capital turnover ratio displays a declining trend initially, from 3.65 in September 2020 to around 1.15-1.53 through late 2023, signaling that the company is utilizing its working capital less intensively to generate sales. However, there is a resurgence in early 2024 onwards, with the ratio increasing to approximately 2.23 by mid-2025. This suggests an enhancement in the efficiency of working capital deployment, likely driven by operational improvements or strategic adjustments.

Summary:
Overall, the activity ratios indicate a period of initial efficiency gains, notably in receivables management. The decline in inventory turnover suggests longer inventory holding periods or increased stock levels, possibly due to strategic inventory positioning or market conditions. Fluctuations in payables turnover reflect adjustments in payment strategies, perhaps balancing liquidity with supplier negotiations. The recovery in working capital turnover in recent periods suggests improved operational efficiency and better utilization of resources. These trends collectively portray a company adjusting its operational practices, balancing liquidity management with sales and inventory strategies.

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Average number of days

The activity ratios for Synaptics Incorporated, specifically Days of Inventory on Hand (DOH), Days of Sales Outstanding (DSO), and Days of Payables, exhibit notable trends over the analyzed period from September 2020 through June 2025.

Inventory Turnover Dynamics:
The DOH ratio indicates that inventory management has experienced fluctuations over the period. At the outset, in September 2020, the company held inventory for approximately 54.25 days. This number declined sharply by December 2020 to approximately 35.61 days, reflecting potentially enhanced inventory turnover or improved supply chain efficiencies during that timeframe. However, subsequent quarters reveal a gradual upward trend, with inventory days rising again to around 83.25 days by September 2023. The increase continues slightly into June 2024, stabilizing near 79.48 days, and further extending to approximately 85.73 days by June 2025. This pattern suggests a progressive build-up or accumulation of inventory, possibly indicative of supply chain cautiousness, inventory buffer strategies, or demand fluctuations.

Accounts Receivable Collection Efficiency:
The DSO metric demonstrates an improvement in receivables management in late 2020 to early 2021, decreasing from approximately 62.88 days in September 2020 to 60.21 days by September 2021. Subsequently, the DSO maintained a general downward trend, reaching a low of approximately 38.07 days at the end of September 2023, indicating increasingly efficient collection processes. Post-September 2023, the DSO exhibits some variability but remains relatively stable, ending at about 44.27 days in June 2025. These figures point to a pattern of improving cash flow management and possibly tighter credit policies.

Payables Management:
The number of days of payables has shown considerable fluctuations, with starting values around 36.55 days in September 2020. There was a notable increase in this ratio during early 2021, reaching approximately 70.40 days in December 2021, which signals extended payment periods to suppliers. After peaking in late 2021 and early 2022, the ratio declined to about 30.68 days in March 2023, reflecting a period of accelerated payable reductions. Subsequently, payables days increased again, reaching nearly 61.01 days by June 2024, before slightly decreasing or stabilizing around 57.58 days in March 2025. The oscillations indicate shifts in payment strategies, possibly influenced by cash flow considerations, supplier negotiations, or strategic liquidity management.

Summary:
Overall, Synaptics has undergone a transition from shorter inventory durations and relatively variable receivables collection periods toward increased inventory holdings and more stabilized payable terms. The declining DSO suggests improved efficiency in receivables management, while the rising DOH indicates increased inventory levels or longer holding periods, which may impact working capital. The variations in payables point to adaptable payables strategies, balancing supplier relations with liquidity management. These trends collectively reflect evolving operational and financial management approaches over the analyzed period.

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Long-term

The analysis of Synaptics Incorporated’s long-term activity ratios indicates a notable trend in the company's asset utilization efficiency over the periods examined.

Starting with the Fixed Asset Turnover ratio, there was a significant increase from 10.24 as of September 30, 2020, to a peak of 28.63 on September 30, 2022. This upward trajectory suggests that the company substantially improved the efficiency with which it utilized its fixed assets to generate revenue during this period. The ratio's subsequent decline to 20.41 as of June 30, 2023 indicates a reduction in fixed asset productivity, although it remains well above initial levels, reflecting sustained efficiency relative to the early period.

The Total Asset Turnover ratio experienced fluctuations throughout the observed timeframe. It decreased from 0.75 at the end of September 2020 to 0.56 by December 2021, then slightly increased and stabilized around 0.64-0.65 until September 2022. However, a consistent downward trend commenced afterward, with the ratio declining from 0.45 on September 30, 2023, to approximately 0.34-0.42 in subsequent periods through June 2025. This overall decline suggests a gradual decrease in the ability of the company's total assets to generate sales, which may reflect factors such as asset base expansion without equivalent revenue growth, or changes in operational efficiency.

In summary, the long-term activity ratios reflect an initial period of improving asset utilization efficiency, particularly in fixed assets, reaching a peak around September 2022. Following that peak, both fixed and total asset turnover ratios show a downward trend, indicating a reduction in overall asset efficiency in generating revenue. These movements underscore a dynamic period of operational change, with initial gains in asset productivity subsequently offset by challenges affecting overall asset utilization.