Texas Instruments Incorporated (TXN)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	1.85	1.76	1.70	1.92	2.27	2.56	2.74	2.88	3.12	3.18	3.12	2.88	2.66	1.60	1.80	2.28	2.62	2.82	2.83	2.81
Receivables turnover	9.80	9.17	9.62	10.39	10.57	9.90	8.95	10.56	10.78	10.64	10.54	9.74	10.23	9.87	11.64	10.73	13.39	10.99	10.74	10.83
Payables turnover	9.21	9.66	6.87	6.63	7.35	7.89	8.46	9.27	10.45	9.93	9.86	9.60	12.51	8.08	9.39	12.59	13.49	14.49	14.28	12.57
Working capital turnover	1.48	1.46	1.47	1.61	1.81	1.84	1.87	1.65	1.65	1.57	1.87	1.77	1.84	1.94	2.16	2.38	2.17	2.20	2.87	2.69

Inventory turnover: The inventory turnover ratio shows how efficiently Texas Instruments is managing its inventory. The decreasing trend in the inventory turnover ratio from Q1 2022 to Q4 2023 indicates that the company is holding onto inventory for a longer period before selling it. This may result in higher carrying costs and potential obsolescence risks.

Receivables turnover: The receivables turnover ratio measures how quickly the company collects cash from its credit sales. Texas Instruments has shown a fluctuating trend in its receivables turnover ratio, with a slight decrease in Q4 2023 compared to Q1 2022. This suggests that the company is taking longer to collect cash from its customers, which may impact its cash flow and liquidity.

Payables turnover: The payables turnover ratio reflects how quickly the company is paying its suppliers. Texas Instruments has experienced fluctuations in its payables turnover ratio, with a decreasing trend from Q1 2022 to Q4 2023. A decreasing payables turnover ratio may indicate that the company is taking longer to pay its suppliers, potentially straining supplier relationships or leading to missed opportunities for early payment discounts.

Working capital turnover: The working capital turnover ratio indicates how effectively Texas Instruments is utilizing its working capital to generate sales. The decreasing trend in the working capital turnover ratio from Q1 2022 to Q4 2023 suggests that the company's efficiency in converting working capital into sales has slightly decreased over the period. This could imply inefficiencies in managing both current assets and liabilities.

Overall, the analysis of Texas Instruments' activity ratios highlights some areas of concern, such as decreasing efficiency in managing inventory, collecting receivables, paying payables, and utilizing working capital. These trends may impact the company's overall operational efficiency and financial performance.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	197.51	207.06	214.55	190.19	160.83	142.54	133.26	126.60	116.81	114.94	117.02	126.74	137.44	227.73	203.08	159.98	139.54	129.41	128.94	129.77
Days of sales outstanding (DSO)	days	37.25	39.82	37.93	35.13	34.54	36.88	40.80	34.56	33.85	34.30	34.64	37.49	35.69	36.99	31.36	34.02	27.26	33.21	33.99	33.72
Number of days of payables	days	39.61	37.78	53.10	55.07	49.64	46.25	43.15	39.39	34.92	36.77	37.01	38.02	29.17	45.17	38.89	28.99	27.06	25.18	25.55	29.05

Texas Instruments Inc.'s activity ratios indicate how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

1. Days of Inventory on Hand (DOH): The trend in DOH shows an increasing number of days the company holds inventory before selling it. This suggests a potential issue with inventory management, as the company is taking longer to turn its inventory into revenue. However, it is important to analyze this ratio in conjunction with sales volume and industry benchmarks to get a clearer picture.

2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes the company to collect payment from its customers. The decreasing trend in DSO over the quarters indicates an improvement in collecting receivables more promptly. Decreasing DSO is typically a positive sign, indicating better cash flow management and potentially more efficient credit policies.

3. Number of Days of Payables: The trend in the number of days of payables shows fluctuations in the time the company takes to pay its suppliers. The increasing trend in this ratio may indicate that the company is taking longer to settle its payables. This can sometimes indicate cash flow issues but may also be a strategic decision to manage working capital effectively or negotiate better payment terms with suppliers.

Overall, to gain a more holistic understanding of Texas Instruments Inc.'s operational efficiency, it is crucial to analyze these activity ratios in conjunction with profitability and liquidity ratios, industry comparisons, and a detailed examination of the company's operational processes.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	1.75	1.94	2.21	2.54	2.91	3.11	3.30	3.49	3.57	4.37	4.56	4.49	4.42	4.31	4.28	4.37	4.35	4.45	4.53	4.70
Total asset turnover	0.54	0.57	0.61	0.67	0.74	0.77	0.79	0.75	0.74	0.76	0.81	0.79	0.75	0.75	0.78	0.82	0.80	0.82	0.88	0.89

The fixed asset turnover ratio for Texas Instruments Inc. has been gradually declining over the past few quarters, indicating that the company is generating less revenue from its fixed assets. This trend may suggest that the company's fixed assets are not being utilized as efficiently as before.

On the other hand, the total asset turnover ratio has also been decreasing over the same period. This could imply that Texas Instruments is becoming less effective in generating sales in relation to its total assets. A declining total asset turnover ratio may indicate that the company is facing challenges in utilizing its overall assets to generate revenue.

Overall, the decreasing trends in both the fixed asset turnover and total asset turnover ratios for Texas Instruments Inc. suggest a potential inefficiency in utilizing assets to drive sales. It may be beneficial for the company to reassess its asset management strategies to improve efficiency and maximize revenue generation.