TE Connectivity Ltd (TEL)

Short-term

Turnover ratios

TE Connectivity Ltd's activity ratios provide insights into the efficiency of the company's operations in managing its assets and liabilities. Here is a detailed analysis based on the data provided:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times TE Connectivity Ltd sells and replaces its inventory during a specific period. The company's inventory turnover has shown some fluctuations over the periods analyzed, ranging from 4.07 to 5.77.
- Overall, the inventory turnover ratio has been relatively stable, indicating that TE Connectivity Ltd manages its inventory efficiently. A higher ratio suggests that the company is selling its inventory quickly, which can be positive for cash flow and profitability.

2. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently TE Connectivity Ltd collects cash from its customers. The company's receivables turnover ratio has also exhibited some variability, ranging from 4.46 to 5.67.
- The fluctuations in the receivables turnover ratio could reflect changes in the company's credit policies or customer payment behavior. Generally, a higher ratio suggests that TE Connectivity Ltd is collecting cash from its customers more quickly.

3. Payables Turnover:
- The payables turnover ratio measures how efficiently TE Connectivity Ltd manages its accounts payable by paying suppliers for goods and services. The company's payables turnover ratio has fluctuated between 6.13 and 8.75.
- A higher payables turnover ratio indicates that TE Connectivity Ltd is paying its suppliers more frequently, which could either be a sign of good relationships with suppliers or potential liquidity constraints if the company is trying to delay payments.

4. Working Capital Turnover:
- The working capital turnover ratio assesses how efficiently TE Connectivity Ltd utilizes its working capital to generate sales revenue. The company's working capital turnover ratio has varied from 4.65 to 7.65.
- A higher working capital turnover ratio suggests that TE Connectivity Ltd is effectively using its current assets to support sales, which can be a positive indicator of operational efficiency.

Overall, the analysis of TE Connectivity Ltd's activity ratios indicates that the company has generally managed its assets and liabilities efficiently, with some fluctuations observed over the periods analyzed. Keeping a close eye on these ratios can help in evaluating operational performance and making informed business decisions.

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Average number of days

TE Connectivity Ltd's activity ratios provide insight into how efficiently the company manages its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- Over the past few quarters, TE Connectivity Ltd has shown fluctuating trends in the days of inventory on hand. The DOH has ranged from a low of 63.27 days to a high of 89.69 days.
- Generally, a decreasing trend in DOH indicates efficient inventory management, while an increasing trend may suggest inventory management issues or lower sales turnover.
- The DOH for the most recent quarter was 73.90 days, which is lower than the peak seen in the past year, indicating some improvement in inventory turnover efficiency.

2. Days of Sales Outstanding (DSO):
- TE Connectivity Ltd's days of sales outstanding have also varied over the quarters, ranging from 64.34 days to 81.84 days.
- A decreasing DSO signifies improved collection efficiency, while an increasing trend may indicate issues with collecting receivables or potential credit risks.
- The DSO for the latest quarter was 70.54 days, slightly higher compared to the previous quarter, suggesting a longer collection period.

3. Number of Days of Payables:
- The number of days of payables for TE Connectivity Ltd has shown some fluctuations over the quarters, ranging from 41.70 days to 59.56 days.
- A decreasing trend in days of payables may indicate potential liquidity issues, while an increasing trend could reflect improved cash flow management.
- In the most recent quarter, TE Connectivity Ltd's days of payables was 50.74 days, which is higher compared to the previous quarter, indicating a longer period the company takes to pay its suppliers.

Overall, these activity ratios suggest that TE Connectivity Ltd may need to focus on improving its collection efficiency and managing payables effectively to enhance its working capital management and overall operational performance.

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Long-term

TE Connectivity Ltd's long-term activity ratios reflect the efficiency with which the company generates sales from its assets. The fixed asset turnover ratio has been relatively stable over the analyzed periods, ranging from 3.56 to 4.55. This indicates that TE Connectivity is effectively utilizing its fixed assets to generate sales, with a trend of gradual improvement over time, reaching a peak of 4.55 in the most recent period.

On the other hand, the total asset turnover ratio has shown some variation, fluctuating between 0.62 and 0.78. This ratio indicates how efficiently the company is utilizing all of its assets to generate revenue. While there have been fluctuations in this ratio, it has generally remained within a relatively narrow range over the analyzed periods.

Overall, TE Connectivity Ltd's long-term activity ratios suggest that the company is efficiently using both its fixed and total assets to generate sales, with a slight improvement in fixed asset turnover and some variability in total asset turnover. This trend indicates effective asset management and revenue generation strategies within the company.