Vicor Corporation (VICR)

Short-term

Turnover ratios

The activity ratios of Vicor Corp. provide insights into the efficiency of the company's operations in managing its inventory, receivables, payables, and working capital.

1. Inventory turnover: The inventory turnover ratio has shown a declining trend over the past five years, indicating that Vicor Corp. is taking longer to sell its inventory. This could potentially suggest issues with inventory management or changing customer demand.

2. Receivables turnover: The receivables turnover ratio has generally been increasing, which signifies that Vicor Corp. is collecting its accounts receivable at a faster pace. This improvement suggests efficient management of credit sales and timely collection from customers.

3. Payables turnover: The payables turnover ratio has been fluctuating but generally improving over the years. This indicates that the company is taking more time to pay its suppliers, which can be advantageous in terms of managing cash flow.

4. Working capital turnover: The working capital turnover ratio has fluctuated over the years, with a decreasing trend in recent years. A lower working capital turnover ratio may indicate inefficiencies in managing working capital to generate sales.

Overall, while the receivables turnover and payables turnover ratios have shown positive trends, the declining trends in inventory turnover and working capital turnover ratios may signal areas where Vicor Corp. could focus on improving operational efficiency.

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Average number of days

Vicor Corp.'s activity ratios provide insights into the efficiency of the company's operations.

1. Days of Inventory on Hand (DOH):
The trend of Vicor Corp.'s DOH has been increasing over the past five years. This indicates that inventory is being held for a longer period before being sold. In 2023, the company had 194.38 days of inventory on hand, which is significantly higher compared to the previous years. This suggests that Vicor Corp. may be facing challenges in managing its inventory efficiently and could be at risk of holding excess or obsolete inventory.

2. Days of Sales Outstanding (DSO):
Vicor Corp.'s DSO has fluctuated over the past five years but shows a general decreasing trend. In 2023, the company had 47.43 days of sales outstanding, indicating that it takes approximately 47 days for the company to collect on its sales. A decreasing trend in DSO is generally positive as it signifies that the company is collecting its accounts receivable more quickly, improving cash flow and liquidity.

3. Number of Days of Payables:
Vicor Corp.'s days of payables have also fluctuated over the years but show a general decreasing trend. In 2023, the company had 22.07 days of payables, indicating that it takes approximately 22 days for the company to pay its trade payables. A decreasing trend in payables days may imply that the company is paying its suppliers more quickly. While this can be seen as a positive relationship-building strategy with suppliers, it may also strain the company's liquidity if not managed effectively.

Overall, when analyzing Vicor Corp.'s activity ratios, it is important to consider how the company's inventory management, accounts receivable collection, and accounts payable policies are impacting its operational efficiency and financial performance.

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Long-term

The long-term activity ratios of Vicor Corp. have displayed fluctuations over the past five years. The fixed asset turnover ratio, which indicates how efficiently the company generates revenue from its investments in fixed assets, has shown a declining trend from 4.99 in 2019 to 2.57 in 2023. This indicates a decrease in the company's ability to generate sales from its fixed assets over time.

On the other hand, the total asset turnover ratio, which assesses how effectively the company utilizes its total assets to generate revenue, has also experienced variability, ranging from 1.09 in 2019 to 0.68 in 2023. This ratio has generally decreased over the period, suggesting a decline in the overall efficiency of the company in generating sales from its total asset base.

The significant decline in both the fixed asset turnover and total asset turnover ratios indicates potential issues with asset utilization and operational efficiency within Vicor Corp. It may be necessary for the company to assess its asset management strategies and possibly reconsider its capital allocation decisions to improve its long-term activity performance.