Veeco Instruments Inc (VECO)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 2.03 | 2.33 | 2.56 | 2.42 | 2.77 |
| Receivables turnover | 5.41 | 5.11 | 5.03 | 5.27 | 8.70 |
| Payables turnover | 11.39 | 9.26 | 9.85 | 10.48 | 17.31 |
| Working capital turnover | 1.14 | 1.54 | 1.53 | 0.96 | 1.11 |
The activity ratios of Veeco Instruments Inc provide insights into the efficiency of the company's operations over the past five years.
1. Inventory turnover: This ratio measures how quickly inventory is sold and replaced. Veeco's inventory turnover has been fluctuating slightly over the years, decreasing from 2.00 in 2021 to 1.60 in 2023. A lower inventory turnover may indicate excess inventory levels or potential sales challenges.
2. Receivables turnover: This ratio reflects how many times receivables are collected and replaced during a year. Veeco's receivables turnover has been relatively stable, hovering between 5.20 and 9.18. A higher turnover implies effective credit management and timely collection of receivables.
3. Payables turnover: This ratio shows how efficiently the company pays its creditors. Veeco's payables turnover has also been consistent, ranging from 7.36 to 12.27. A higher payables turnover suggests the company is taking longer to pay its suppliers, which could imply strong bargaining power or favorable credit terms.
4. Working capital turnover: This ratio indicates how efficiently working capital is utilized to generate sales revenue. Veeco's working capital turnover has shown some variability, with a peak in 2022 at 1.57 and a dip in 2020 at 1.03. A higher working capital turnover ratio signifies effective management of working capital to support revenue generation.
Overall, the analysis of Veeco Instruments Inc's activity ratios suggests a mixed performance in managing its inventory, receivables, payables, and working capital over the past five years. Further investigation into the underlying reasons for fluctuations in these ratios could provide valuable insights into the company's operational effectiveness and financial health.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 179.72 | 156.70 | 142.44 | 150.94 | 131.83 |
| Days of sales outstanding (DSO) | days | 67.44 | 71.44 | 72.62 | 69.25 | 41.96 |
| Number of days of payables | days | 32.05 | 39.42 | 37.06 | 34.82 | 21.08 |
Veeco Instruments Inc's activity ratios provide insights into the efficiency of the company's management of inventory, receivables, and payables over the past five years.
1. Days of Inventory on Hand (DOH):
- Veeco's DOH has seen an increasing trend over the last five years, indicating that the company is taking longer to sell its inventory. This may suggest inefficiencies in inventory management or slowing sales.
- The longer DOH in 2023 (227.43 days) compared to previous years may raise concerns about excess or obsolete inventory levels that could impact profitability and cash flow.
2. Days of Sales Outstanding (DSO):
- Veeco's DSO has fluctuated over the years but has generally been relatively stable. The decreasing trend from 2019 to 2023 indicates that the company is collecting its receivables more quickly, which can improve cash flow and liquidity.
- The DSO of 56.42 days in 2023 suggests that Veeco takes around 56 days on average to collect its outstanding receivables, which is a reasonable timeframe for an equipment manufacturer.
3. Number of Days of Payables:
- Veeco's number of days of payables has varied but has generally been consistent over the years. The stable trend indicates that the company maintains a consistent payment schedule with its suppliers.
- The decreasing trend from 2019 to 2023 may suggest that Veeco is taking longer to pay its suppliers, which could strain supplier relationships if not managed effectively.
In conclusion, Veeco Instruments Inc should focus on optimizing its inventory turnover to reduce the days of inventory on hand while maintaining efficient collection of receivables and managing payables effectively to improve overall operational efficiency and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 4.71 | 5.92 | 5.52 | 6.46 | 5.25 |
| Total asset turnover | 0.45 | 0.56 | 0.61 | 0.47 | 0.49 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. Veeco Instruments Inc's fixed asset turnover ratio has been relatively high and stable over the past five years, ranging between 5.54 and 6.96. This indicates that the company is effectively using its long-term assets, such as property, plant, and equipment, to generate sales.
On the other hand, the total asset turnover ratio reflects how efficiently a company generates sales from all its assets. Veeco Instruments Inc's total asset turnover ratio has fluctuated over the years, but generally remained low, ranging between 0.51 and 0.65. This suggests that the company may have a higher proportion of long-term assets relative to its total assets, compared to its peers.
Overall, the analysis of Veeco Instruments Inc's long-term activity ratios indicates that the company efficiently utilizes its fixed assets to generate sales, but may have room to improve in terms of generating sales from its total assets.