Viavi Solutions Inc (VIAV)

Short-term

Turnover ratios

The activity ratios of Viavi Solutions Inc. over the specified periods provide insight into the company's operational efficiency and asset management effectiveness.

Inventory Turnover:
The inventory turnover ratio experienced a decline from 5.11 times in June 2021 to 4.71 in June 2022, followed by a further decrease to 4.02 in June 2023. Subsequently, there was a modest recovery to 4.40 in June 2024, although it declined again to 3.97 in June 2025. This trend indicates a general decrease in inventory efficiency over the period, suggesting that inventory is turning over less frequently, potentially due to slower sales or higher inventory holding levels.

Receivables Turnover:
The receivables turnover ratio increased from 4.67 in June 2021 to 4.95 in June 2022, then slightly decreased to 4.78 in June 2023. It further declined to 4.08 in June 2024 before increasing marginally to 4.15 in June 2025. Overall, receivables collection efficiency shows moderate fluctuation; it remains relatively stable but indicates a slight weakening in receivables management around 2024, before marginal improvement in the subsequent year.

Payables Turnover:
This ratio rose markedly from 7.67 in June 2021 to 8.90 in June 2022 and then to 9.90 in June 2023, reaching its peak in this period. Afterwards, it decreased to 8.42 in June 2024 and further declined to 6.80 in June 2025. The initial increase suggests a period of faster payments to suppliers or possibly stretching payables. The subsequent decline indicates a possible extension in payment periods, which could impact supplier relationships or reflect strategic management of cash flows.

Working Capital Turnover:
The working capital turnover ratio declined sharply from 3.29 in June 2021 to 2.03 in June 2022, and further down to 1.84 in June 2023 and 1.59 in June 2024. However, there was a significant rebound to 3.67 in June 2025. This pattern suggests that operational efficiency in generating sales from working capital diminished over the earlier years, possibly due to increased working capital needs or reduced sales efficiency, but then improved substantially in 2025.

Summary:
Overall, Viavi Solutions Inc.'s activity ratios depict a period of decreased operational turnover across inventory, receivables, and working capital metrics, indicating potential challenges in managing current assets efficiently. The fluctuations in payables turnover suggest strategic shifts in payment policies. The notable rebound in working capital turnover in 2025 points to improved asset utilization or operational efficiencies emerging after a period of decline. These trends should be considered in conjunction with broader operational and financial contexts to assess the company's operational health comprehensively.

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Average number of days

The analysis of Viavi Solutions Inc.'s activity ratios over the period from June 30, 2021, to June 30, 2025, reveals notable trends in inventory management, receivables collection, and payables obligations.

Days of Inventory on Hand (DOH):
The DOH has exhibited an increasing trend, rising from 71.49 days in 2021 to a peak of 91.95 days in 2025. Specifically, there was a gradual increase from 71.49 days in 2021 to 77.45 days in 2022, followed by a more substantial expansion to 90.68 days in 2023. Although a decrease occurred in 2024 to 82.97 days, the ratio again increased slightly in 2025. This pattern suggests that the company has been holding inventory for longer periods over time, which may indicate changes in inventory turnover efficiency or shifts in inventory management strategy.

Days of Sales Outstanding (DSO):
The DSO figures demonstrate relatively stable receivables collection periods, with some fluctuations. It decreased from 78.09 days in 2021 to 73.68 days in 2022, then increased slightly to 76.29 days in 2023. A more pronounced rise is observable in 2024, reaching 89.35 days, with a slight decrease to 87.86 days in 2025. The overall trend points to a lengthening of the receivables collection cycle, especially evident in 2024. This may reflect extended credit terms, collection delays, or shifts in customer payment behaviors.

Number of Days of Payables:
The company's payables period has shown variability, decreasing from 47.61 days in 2021 to 36.87 days in 2023, indicating that the company was settling its payables more quickly during that period. However, the payables period increased again to 43.34 days in 2024 and further to 53.66 days in 2025, suggesting a trend toward extending payment terms or delaying payments to suppliers.

Summary:
Overall, Viavi Solutions Inc. has experienced a gradual extension in the durations of inventory holding, receivables collection, and payables payment periods. The lengthening of inventory and receivables cycles may point toward increased working capital requirements and potential liquidity considerations. Concurrently, the extension of days payable may reflect efforts to optimize cash flow, but prolonged delays in payments could impact supplier relationships. These shifts should be considered in assessing the company's operational efficiency and liquidity management strategies over the analyzed period.

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Long-term

The long-term activity ratios for Viavi Solutions Inc. reveal notable trends over the analyzed period. The Fixed Asset Turnover ratio demonstrates a declining pattern, decreasing from 6.12 in June 2021 to 5.65 in June 2022, and further to 4.55 in June 2023. This decline suggests that the company is generating less revenue per dollar of fixed assets over time, which could be indicative of reduced efficiency in utilizing its fixed assets or a strategic shift in asset deployment.

Concurrently, the Total Asset Turnover ratio exhibits a modest upward trend from 0.61 in June 2021 to a peak of 0.71 in June 2022, followed by a slight decrease to 0.60 in June 2023. The ratio’s decline post-2022 indicates a reduction in overall asset utilization efficiency, albeit the fluctuation may also reflect changes in asset composition or revenue generation strategies.

Overall, the data indicates a reduction in asset efficiency for Viavi Solutions Inc. over the analyzed timeframe, with fixed assets becoming less productive relative to revenue generation, while total assets show variable utilization levels. This trend warrants attention as it may impact the company’s long-term operational efficiency and asset management strategy.