Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
NXP Semiconductors N.V., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
The analysis of the quarterly financial ratios and periods reveals multiple trends relating to operational efficiency and working capital management.
- Inventory turnover
- The inventory turnover ratio demonstrates a declining trend over the observed periods, decreasing from 4.32 to 3.69. This suggests a slower inventory movement, potentially indicating increased inventory levels or slower sales activity.
- Receivables turnover
- Receivables turnover shows a general upward trend, rising from 10.99 to 12.4. This indicates improved collection efficiency, with the company collecting receivables more frequently during the later periods.
- Payables turnover
- The payables turnover ratio decreases from 4.42 to 3.69, implying that the company is taking longer to pay its suppliers. This may reflect extended payment terms or strategic cash management.
- Working capital turnover
- The working capital turnover ratio exhibits marked fluctuations, with an initial decrease to 3.36, a peak at 8.21, followed by a decline to 3.65. The volatility suggests inconsistent utilization of working capital during this timeframe.
- Average inventory processing period
- The average number of days inventory is held increases steadily from 84 to 99 days. This complements the declining inventory turnover, confirming slower inventory movement and potentially higher holding costs.
- Average receivable collection period
- The period for collecting receivables improves, shortening from 33 days to 29 days over the periods, aligning with the increased receivables turnover and indicating improved cash collections.
- Operating cycle
- The operating cycle remains relatively stable but shows a slight increase from 117 days to 128 days, signaling that overall the time taken to convert inventory and receivables into cash is lengthening.
- Average payables payment period
- The average payment period to suppliers extends from 83 days to 99 days, consistent with the declining payables turnover, indicating the company is holding payables longer, which may help liquidity but could impact supplier relationships.
- Cash conversion cycle
- The cash conversion cycle fluctuates, starting at 34 days, dipping to 25 days, then rising back to 29 days. Despite fluctuations, the general trend suggests the company manages to maintain a relatively short duration from cash outlay to cash inflow.
In summary, the data illustrates a slowdown in inventory turnover with rising inventory days, improved receivables management with faster collections, and longer payables periods, implying an extended time to pay suppliers. These combined factors result in a relatively stable cash conversion cycle, though variation in working capital turnover indicates inconsistent efficiency in utilizing working capital throughout the periods analyzed.
Turnover Ratios
Average No. Days
Inventory Turnover
NXP Semiconductors N.V., inventory turnover calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Cost of revenue | 1,430) | 1,359) | 1,332) | 1,278) | 1,174) | 1,212) | |||
| Inventories, net | 1,462) | 1,311) | 1,189) | 1,173) | 1,116) | 1,056) | |||
| Short-term Activity Ratio | |||||||||
| Inventory turnover1 | 3.69 | 3.92 | 4.20 | 4.16 | 4.28 | 4.32 | |||
| Benchmarks | |||||||||
| Inventory Turnover, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 4.24 | 4.00 | 4.35 | 4.15 | 4.10 | 3.81 | |||
| Analog Devices Inc. | 3.78 | 3.66 | 2.33 | 3.16 | 3.16 | 3.18 | |||
| Applied Materials Inc. | 2.60 | 2.79 | 2.82 | 2.80 | 2.65 | 2.55 | |||
| Broadcom Inc. | 6.40 | 6.95 | 8.18 | 9.10 | 10.44 | 11.01 | |||
| Intel Corp. | 3.02 | 2.97 | 3.27 | 3.50 | 3.91 | 4.15 | |||
| KLA Corp. | 1.75 | 1.73 | 1.76 | 1.81 | 1.76 | 1.77 | |||
| Lam Research Corp. | 2.89 | 2.95 | 2.91 | 2.78 | 2.71 | 2.77 | |||
| Micron Technology Inc. | 3.14 | 3.60 | 3.85 | 3.73 | 3.43 | 2.74 | |||
| NVIDIA Corp. | 3.75 | 3.63 | 3.44 | 3.69 | 3.47 | 3.81 | |||
| Qualcomm Inc. | 3.58 | 3.90 | 4.42 | 4.18 | 4.41 | 4.17 | |||
| Texas Instruments Inc. | 2.74 | 2.88 | 3.12 | 3.18 | 3.12 | 2.88 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Inventory turnover
= (Cost of revenueQ2 2022
+ Cost of revenueQ1 2022
+ Cost of revenueQ4 2021
+ Cost of revenueQ3 2021)
÷ Inventories, net
= (1,430 + 1,359 + 1,332 + 1,278)
÷ 1,462 = 3.69
2 Click competitor name to see calculations.
The financial data reveals a consistent upward trend in the cost of revenue over the six quarters observed. Starting from 1,212 million US dollars in April 2021, this figure rose steadily to 1,430 million US dollars by July 2022. This indicates an increasing expense related to the production of goods sold, which may reflect higher sales volume, increased input costs, or changes in production efficiency.
Inventories, net, similarly show a progressive increase over the same period, growing from 1,056 million US dollars to 1,462 million US dollars. This rise in inventory levels suggests accumulation of stock, which could be due to anticipated demand increases, supply chain considerations, or slower inventory turnover.
The inventory turnover ratio exhibits a declining pattern throughout the six quarters. It decreased from 4.32 in April 2021 to 3.69 in July 2022. A declining inventory turnover ratio indicates that inventories are being sold and replaced less frequently, implying potential deceleration in sales or increased inventory holding periods. This trend warrants further monitoring since prolonged lower turnover can lead to obsolescence or increased carrying costs.
- Cost of Revenue
- Shows a steady increase, indicating rising production costs or sales growth.
- Inventories, Net
- Increasing trend suggests stock accumulation, potentially due to demand or supply chain factors.
- Inventory Turnover Ratio
- Despite higher inventories and cost of revenue, the turnover ratio declines, indicating slower inventory movement.
Overall, the financial trends suggest rising operational activity along with increasing inventory levels but reduced efficiency in inventory management. This pattern may impact liquidity and operational flexibility if not addressed or aligned with sales growth prospects.
Receivables Turnover
NXP Semiconductors N.V., receivables turnover calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Revenue | 3,312) | 3,136) | 3,039) | 2,861) | 2,596) | 2,567) | |||
| Accounts receivables, net | 996) | 925) | 923) | 979) | 991) | 833) | |||
| Short-term Activity Ratio | |||||||||
| Receivables turnover1 | 12.40 | 12.58 | 11.99 | 10.76 | 10.03 | 10.99 | |||
| Benchmarks | |||||||||
| Receivables Turnover, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 5.33 | 5.13 | 6.07 | 6.68 | 6.60 | 5.24 | |||
| Analog Devices Inc. | 6.07 | 5.16 | 5.02 | 7.90 | 7.62 | 7.08 | |||
| Applied Materials Inc. | 5.09 | 5.49 | 4.66 | 5.66 | 5.87 | 5.98 | |||
| Broadcom Inc. | 9.73 | 11.23 | 13.25 | 11.87 | 10.54 | 9.78 | |||
| Intel Corp. | 12.11 | 10.98 | 8.36 | 9.34 | 10.40 | 10.78 | |||
| KLA Corp. | 4.72 | 5.10 | 5.30 | 5.37 | 4.98 | 5.77 | |||
| Lam Research Corp. | 4.86 | 4.64 | 4.83 | 4.72 | 4.11 | 4.77 | |||
| Micron Technology Inc. | 5.79 | 5.64 | 5.22 | 6.02 | 7.01 | 5.98 | |||
| NVIDIA Corp. | 6.11 | 6.37 | 6.86 | 5.80 | 6.27 | 6.18 | |||
| Texas Instruments Inc. | 8.95 | 10.56 | 10.78 | 10.64 | 10.54 | 9.74 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Receivables turnover
= (RevenueQ2 2022
+ RevenueQ1 2022
+ RevenueQ4 2021
+ RevenueQ3 2021)
÷ Accounts receivables, net
= (3,312 + 3,136 + 3,039 + 2,861)
÷ 996 = 12.40
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends over the six quarters analyzed. Revenue displayed a consistent upward trajectory, increasing steadily from approximately $2,567 million in early April 2021 to about $3,312 million by early July 2022. This suggests continued growth in the company's sales and operational scale throughout the period under review.
Accounts receivables, net, fluctuated within a narrower range over the same timeframe. The values rose from $833 million at the start to peak around $991 million in the middle of 2021, followed by a moderate decline and subsequent stabilization just below the initial peak, finishing at $996 million by July 2022. The relative stability indicates controlled credit management despite rising revenues.
Receivables turnover ratio, which measures how efficiently the company collects its receivables, varied notably. It declined from 10.99 to 10.03 in the first half of 2021, indicating somewhat slower collection initially, but then increased steadily to reach 12.58 by April 2022 before a slight decrease to 12.4 in July 2022. Higher turnover values toward the end of the period imply improved collection efficiency, potentially enhancing cash flow management as revenues grew.
- Revenue Growth
- Consistent and sustained increase across all quarters, indicating strong sales performance.
- Accounts Receivables, Net
- Some fluctuations but generally stable levels, reflecting steady management of outstanding customer balances.
- Receivables Turnover Ratio
- Initial decline followed by a significant improvement, suggesting enhanced efficiency in collecting receivables during the latter quarters.
- Overall Implications
- Revenue expansion combined with improved receivables turnover indicates effective operational and credit management, potentially contributing to stronger liquidity and financial health.
Payables Turnover
NXP Semiconductors N.V., payables turnover calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Cost of revenue | 1,430) | 1,359) | 1,332) | 1,278) | 1,174) | 1,212) | |||
| Accounts payable | 1,462) | 1,369) | 1,252) | 1,140) | 1,167) | 1,033) | |||
| Short-term Activity Ratio | |||||||||
| Payables turnover1 | 3.69 | 3.76 | 3.99 | 4.28 | 4.10 | 4.42 | |||
| Benchmarks | |||||||||
| Payables Turnover, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 5.97 | 5.78 | 6.05 | 7.29 | 8.31 | 6.38 | |||
| Analog Devices Inc. | 9.01 | 8.17 | 6.30 | 7.82 | 7.25 | 8.66 | |||
| Broadcom Inc. | 9.98 | 9.80 | 9.77 | 10.91 | 12.63 | 11.67 | |||
| Intel Corp. | 4.63 | 4.92 | 6.13 | 5.05 | 5.82 | 6.49 | |||
| KLA Corp. | 8.43 | 7.79 | 8.10 | 8.88 | 9.53 | 9.69 | |||
| Lam Research Corp. | 9.31 | 10.12 | 9.43 | 9.33 | 8.82 | 8.94 | |||
| NVIDIA Corp. | 5.38 | 5.94 | 5.23 | 5.03 | 5.44 | 5.65 | |||
| Qualcomm Inc. | 4.37 | 4.28 | 5.19 | 4.83 | 4.62 | 4.38 | |||
| Texas Instruments Inc. | 8.46 | 9.27 | 9.14 | 9.93 | 9.86 | 9.60 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Payables turnover
= (Cost of revenueQ2 2022
+ Cost of revenueQ1 2022
+ Cost of revenueQ4 2021
+ Cost of revenueQ3 2021)
÷ Accounts payable
= (1,430 + 1,359 + 1,332 + 1,278)
÷ 1,462 = 3.69
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company's operational and financial metrics.
- Cost of Revenue
- The cost of revenue demonstrates a consistent upward trend over the six quarters observed. Starting at 1,212 million USD in April 2021, it increased moderately through the year, reaching 1,332 million USD by December 2021. In the first two quarters of 2022, the cost continued to rise, peaking at 1,430 million USD in July 2022. This steady increase may indicate higher production costs or expanded operational activity during the period.
- Accounts Payable
- Accounts payable also show a growing trend, moving from 1,033 million USD in April 2021 to 1,462 million USD by July 2022. The increase suggests that the company is taking longer to pay its suppliers or that its purchasing levels have risen, possibly reflecting increased inventory procurement or extended credit terms.
- Payables Turnover Ratio
- The payables turnover ratio decreased from 4.42 in April 2021 to 3.69 in July 2022. This decline indicates that the company is turning over its accounts payable at a slower rate. A lower turnover ratio can imply longer payment cycles, consistent with the upward trend in accounts payable. This change may affect the company's liquidity dynamics and negotiating power with suppliers.
In summary, the data portray rising costs alongside increased liabilities in accounts payable, coupled with a decreasing payables turnover ratio. This combination suggests an expansion in operations, potentially accompanied by extended credit periods from suppliers, warranting attention to working capital management moving forward.
Working Capital Turnover
NXP Semiconductors N.V., working capital turnover calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||
| Current assets | 6,320) | 5,275) | 5,228) | 4,721) | 5,291) | 4,024) | |||
| Less: Current liabilities | 2,941) | 2,845) | 2,452) | 3,438) | 2,336) | 2,265) | |||
| Working capital | 3,379) | 2,430) | 2,776) | 1,283) | 2,955) | 1,759) | |||
| Revenue | 3,312) | 3,136) | 3,039) | 2,861) | 2,596) | 2,567) | |||
| Short-term Activity Ratio | |||||||||
| Working capital turnover1 | 3.65 | 4.79 | 3.99 | 8.21 | 3.36 | 5.21 | |||
| Benchmarks | |||||||||
| Working Capital Turnover, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 2.72 | 2.42 | 3.78 | 3.36 | 2.71 | 2.64 | |||
| Analog Devices Inc. | 4.23 | 3.50 | 2.81 | 21.89 | 49.24 | 6.18 | |||
| Applied Materials Inc. | 2.89 | 2.56 | 2.36 | 2.14 | 1.95 | 1.86 | |||
| Broadcom Inc. | 3.80 | 3.15 | 2.66 | 2.90 | 3.27 | 3.25 | |||
| Intel Corp. | 3.14 | 2.34 | 2.61 | 2.47 | 3.16 | 3.59 | |||
| KLA Corp. | 2.08 | 2.06 | 1.93 | 1.91 | 1.90 | 1.97 | |||
| Lam Research Corp. | 2.01 | 2.04 | 1.80 | 1.72 | 1.51 | 1.41 | |||
| Micron Technology Inc. | 2.14 | 2.17 | 2.05 | 1.95 | 1.98 | 2.04 | |||
| NVIDIA Corp. | 1.03 | 1.36 | 1.37 | 1.38 | 1.06 | 0.67 | |||
| Qualcomm Inc. | 4.80 | 4.53 | 4.13 | 3.96 | 3.19 | 2.53 | |||
| Texas Instruments Inc. | 1.87 | 1.65 | 1.65 | 1.57 | 1.87 | 1.77 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Working capital turnover
= (RevenueQ2 2022
+ RevenueQ1 2022
+ RevenueQ4 2021
+ RevenueQ3 2021)
÷ Working capital
= (3,312 + 3,136 + 3,039 + 2,861)
÷ 3,379 = 3.65
2 Click competitor name to see calculations.
The quarterly financial data reveals fluctuating trends in working capital, revenue, and working capital turnover over the specified periods. An analysis of these trends provides insights into the company's operational efficiency and liquidity management.
- Working Capital
- Working capital exhibited variability across the quarters. It started at USD 1,759 million and peaked at USD 2,955 million in July 2021, before declining to USD 1,283 million in October 2021. Subsequently, it recovered to USD 2,776 million at the end of 2021, with moderate fluctuations observed in 2022, reaching USD 3,379 million by July 2022. This pattern suggests periodic changes in the company's short-term assets and liabilities, possibly influenced by inventory levels, receivables, and payables management.
- Revenue
- Revenue demonstrated a consistent upward trajectory throughout the quarters. Starting from USD 2,567 million in April 2021, revenue increased steadily to USD 3,312 million by July 2022. This reflects sustained growth in sales or service income over the periods analyzed, indicating positive market demand or improved business performance.
- Working Capital Turnover Ratio
- The working capital turnover ratio showed significant fluctuations, indicating variability in the efficiency with which the company utilized its working capital to generate revenue. The ratio was highest at 8.21 in October 2021, implying efficient use of working capital during that quarter. However, it dipped to 3.36 in July 2021 and further decreased to 3.65 by July 2022, with values in between reflecting moderate efficiency levels. These oscillations may suggest changes in operational conditions or shifts in asset and liability management strategies.
In summary, revenue growth remains robust and consistent, while working capital experiences fluctuations that impact turnover efficiency. The company may benefit from focusing on stabilizing working capital management to enhance operational efficiency further, aligning resource utilization more closely with revenue expansion.
Average Inventory Processing Period
NXP Semiconductors N.V., average inventory processing period calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Inventory turnover | 3.69 | 3.92 | 4.20 | 4.16 | 4.28 | 4.32 | |||
| Short-term Activity Ratio (no. days) | |||||||||
| Average inventory processing period1 | 99 | 93 | 87 | 88 | 85 | 84 | |||
| Benchmarks (no. days) | |||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 86 | 91 | 84 | 88 | 89 | 96 | |||
| Analog Devices Inc. | 97 | 100 | 157 | 115 | 116 | 115 | |||
| Applied Materials Inc. | 140 | 131 | 129 | 130 | 138 | 143 | |||
| Broadcom Inc. | 57 | 53 | 45 | 40 | 35 | 33 | |||
| Intel Corp. | 121 | 123 | 112 | 104 | 93 | 88 | |||
| KLA Corp. | 208 | 211 | 207 | 202 | 207 | 206 | |||
| Lam Research Corp. | 126 | 124 | 126 | 131 | 135 | 132 | |||
| Micron Technology Inc. | 116 | 101 | 95 | 98 | 106 | 133 | |||
| NVIDIA Corp. | 97 | 100 | 106 | 99 | 105 | 96 | |||
| Qualcomm Inc. | 102 | 93 | 83 | 87 | 83 | 88 | |||
| Texas Instruments Inc. | 133 | 127 | 117 | 115 | 117 | 127 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.69 = 99
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio exhibits a gradual decline over the observed periods. Starting at 4.32 in early April 2021, it decreased marginally to 4.28 and then to 4.16 by October 2021. A slight recovery to 4.20 was noted at the end of December 2021, followed by a continued and more pronounced decline to 3.92 in April 2022 and further down to 3.69 by July 2022. This downward trend indicates a deceleration in the frequency at which inventory is sold and replaced, suggesting potential challenges in inventory management or changes in sales dynamics.
- Average Inventory Processing Period
- The average inventory processing period measured in days shows an increasing trend throughout the periods. Starting at 84 days in April 2021, it increased slightly to 85 days in July and further to 88 days by October. A minor decrease to 87 days was observed at the end of 2021, but subsequent periods saw a notable rise to 93 days in April 2022 and reaching 99 days in July 2022. This elongation in the inventory processing period complements the declining turnover ratio, implying that inventory remains in stock for longer durations before being sold or used.
- Overall Interpretation
- The combination of declining inventory turnover and increasing average processing period suggests a slowdown in inventory movement. This may reflect operational bottlenecks, shifts in demand, or strategic decisions to hold more inventory. The trends could have implications for working capital efficiency, potentially increasing holding costs and impacting cash flow. Close monitoring and potential adjustments in inventory management strategies may be necessary to optimize performance.
Average Receivable Collection Period
NXP Semiconductors N.V., average receivable collection period calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Receivables turnover | 12.40 | 12.58 | 11.99 | 10.76 | 10.03 | 10.99 | |||
| Short-term Activity Ratio (no. days) | |||||||||
| Average receivable collection period1 | 29 | 29 | 30 | 34 | 36 | 33 | |||
| Benchmarks (no. days) | |||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 69 | 71 | 60 | 55 | 55 | 70 | |||
| Analog Devices Inc. | 60 | 71 | 73 | 46 | 48 | 52 | |||
| Applied Materials Inc. | 72 | 67 | 78 | 65 | 62 | 61 | |||
| Broadcom Inc. | 38 | 33 | 28 | 31 | 35 | 37 | |||
| Intel Corp. | 30 | 33 | 44 | 39 | 35 | 34 | |||
| KLA Corp. | 77 | 72 | 69 | 68 | 73 | 63 | |||
| Lam Research Corp. | 75 | 79 | 76 | 77 | 89 | 77 | |||
| Micron Technology Inc. | 63 | 65 | 70 | 61 | 52 | 61 | |||
| NVIDIA Corp. | 60 | 57 | 53 | 63 | 58 | 59 | |||
| Texas Instruments Inc. | 41 | 35 | 34 | 34 | 35 | 37 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 12.40 = 29
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio exhibited a fluctuating yet generally upward trend over the reported periods. Beginning at 10.99 in April 2021, it dipped slightly to 10.03 in July 2021, recovered modestly to 10.76 by October 2021, and then increased more substantially to peak at 12.58 in April 2022. A slight decline to 12.4 was observed in July 2022, which remains relatively high compared to the initial periods. This pattern suggests improved efficiency in collecting receivables over time, particularly in the latest quarters.
- Average Receivable Collection Period
- The average collection period demonstrated an inverse trend relative to the receivables turnover ratio. Starting at 33 days in April 2021, the collection period increased to 36 days by July 2021, then gradually shortened to 34 days in October 2021. A more pronounced reduction occurred in subsequent quarters, reaching 30 days in December 2021 and further declining to 29 days in both April and July 2022. This trend indicates accelerating collection speed, improving cash flow and liquidity management.
- Overall Insight
- There is a clear correlation between the receivables turnover and the average collection period; as the turnover ratio increased, the collection period decreased. This suggests enhanced effectiveness in managing accounts receivable, leading to quicker conversion of sales into cash. The improvements are particularly marked in the most recent four quarters, which may reflect strategic initiatives or market conditions favoring accelerated receivable collection. Maintaining or further improving these metrics could positively impact working capital and operational efficiency.
Operating Cycle
NXP Semiconductors N.V., operating cycle calculation (quarterly data)
No. days
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Average inventory processing period | 99 | 93 | 87 | 88 | 85 | 84 | |||
| Average receivable collection period | 29 | 29 | 30 | 34 | 36 | 33 | |||
| Short-term Activity Ratio | |||||||||
| Operating cycle1 | 128 | 122 | 117 | 122 | 121 | 117 | |||
| Benchmarks | |||||||||
| Operating Cycle, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 155 | 162 | 144 | 143 | 144 | 166 | |||
| Analog Devices Inc. | 157 | 171 | 230 | 161 | 164 | 167 | |||
| Applied Materials Inc. | 212 | 198 | 207 | 195 | 200 | 204 | |||
| Broadcom Inc. | 95 | 86 | 73 | 71 | 70 | 70 | |||
| Intel Corp. | 151 | 156 | 156 | 143 | 128 | 122 | |||
| KLA Corp. | 285 | 283 | 276 | 270 | 280 | 269 | |||
| Lam Research Corp. | 201 | 203 | 202 | 208 | 224 | 209 | |||
| Micron Technology Inc. | 179 | 166 | 165 | 159 | 158 | 194 | |||
| NVIDIA Corp. | 157 | 157 | 159 | 162 | 163 | 155 | |||
| Texas Instruments Inc. | 174 | 162 | 151 | 149 | 152 | 164 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 99 + 29 = 128
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends regarding inventory management, receivables collection, and the overall operating cycle within the periods from April 2021 to July 2022.
- Average Inventory Processing Period
- The average inventory processing period exhibited a generally increasing trend over the examined periods. Beginning at 84 days in April 2021, it slightly increased to 85 and then climbed gradually through the subsequent quarters, reaching 99 days by July 2022. This upward trend suggests a lengthening in the time inventory remains on hand before being processed or sold, which could indicate slower inventory turnover or changes in inventory management strategies.
- Average Receivable Collection Period
- The average receivable collection period showed a modest decline overall throughout the timeframe. Starting at 33 days in April 2021, it fluctuated slightly—rising to 36 days in July 2021, then steadily decreasing to 29 days by April and July 2022. This improvement implies that the company enhanced its efficiency in collecting outstanding receivables or tightened credit terms, resulting in faster cash inflows from customers.
- Operating Cycle
- The operating cycle, which combines inventory processing and receivable collection periods, demonstrated a variable but mostly increasing pattern. It began at 117 days in April 2021, reached a peak of 122 days in October 2021 and April 2022, and further increased to 128 days in July 2022. The elongation of the operating cycle corresponds largely with the increase in inventory processing time, suggesting that the company’s overall working capital investment period is extending, potentially impacting liquidity and operational efficiency.
In summary, while receivables collection has become more efficient, the lengthening inventory processing period has extended the total operating cycle. This divergence indicates a possible need for further attention to inventory management to balance the working capital cycle effectively.
Average Payables Payment Period
NXP Semiconductors N.V., average payables payment period calculation (quarterly data)
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Payables turnover | 3.69 | 3.76 | 3.99 | 4.28 | 4.10 | 4.42 | |||
| Short-term Activity Ratio (no. days) | |||||||||
| Average payables payment period1 | 99 | 97 | 91 | 85 | 89 | 83 | |||
| Benchmarks (no. days) | |||||||||
| Average Payables Payment Period, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 61 | 63 | 60 | 50 | 44 | 57 | |||
| Analog Devices Inc. | 41 | 45 | 58 | 47 | 50 | 42 | |||
| Broadcom Inc. | 37 | 37 | 37 | 33 | 29 | 31 | |||
| Intel Corp. | 79 | 74 | 60 | 72 | 63 | 56 | |||
| KLA Corp. | 43 | 47 | 45 | 41 | 38 | 38 | |||
| Lam Research Corp. | 39 | 36 | 39 | 39 | 41 | 41 | |||
| NVIDIA Corp. | 68 | 61 | 70 | 72 | 67 | 65 | |||
| Qualcomm Inc. | 83 | 85 | 70 | 76 | 79 | 83 | |||
| Texas Instruments Inc. | 43 | 39 | 40 | 37 | 37 | 38 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 3.69 = 99
2 Click competitor name to see calculations.
The payables turnover ratio exhibits a declining trend over the observed periods. Starting from 4.42 in April 2021, the ratio gradually decreases to 3.69 by July 2022. This decline suggests that the company is turning over its payables less frequently over time.
Corresponding to this trend, the average payables payment period increases consistently. It rises from 83 days in April 2021 to 99 days in July 2022. This indicates that the company is taking longer to pay its suppliers, which aligns with the observed decrease in the payables turnover ratio.
Overall, the data reveals a pattern of lengthening payment terms or delayed payment practices, resulting in slower payables turnover. This could reflect strategic cash management decisions or changes in supplier agreements.
Cash Conversion Cycle
NXP Semiconductors N.V., cash conversion cycle calculation (quarterly data)
No. days
| Jul 3, 2022 | Apr 3, 2022 | Dec 31, 2021 | Oct 3, 2021 | Jul 4, 2021 | Apr 4, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Average inventory processing period | 99 | 93 | 87 | 88 | 85 | 84 | |||
| Average receivable collection period | 29 | 29 | 30 | 34 | 36 | 33 | |||
| Average payables payment period | 99 | 97 | 91 | 85 | 89 | 83 | |||
| Short-term Activity Ratio | |||||||||
| Cash conversion cycle1 | 29 | 25 | 26 | 37 | 32 | 34 | |||
| Benchmarks | |||||||||
| Cash Conversion Cycle, Competitors2 | |||||||||
| Advanced Micro Devices Inc. | 94 | 99 | 84 | 93 | 100 | 109 | |||
| Analog Devices Inc. | 116 | 126 | 172 | 114 | 114 | 125 | |||
| Broadcom Inc. | 58 | 49 | 36 | 38 | 41 | 39 | |||
| Intel Corp. | 72 | 82 | 96 | 71 | 65 | 66 | |||
| KLA Corp. | 242 | 236 | 231 | 229 | 242 | 231 | |||
| Lam Research Corp. | 162 | 167 | 163 | 169 | 183 | 168 | |||
| NVIDIA Corp. | 89 | 96 | 89 | 90 | 96 | 90 | |||
| Texas Instruments Inc. | 131 | 123 | 111 | 112 | 115 | 126 | |||
Based on: 10-Q (reporting date: 2022-07-03), 10-Q (reporting date: 2022-04-03), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-03), 10-Q (reporting date: 2021-07-04), 10-Q (reporting date: 2021-04-04).
1 Q2 2022 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 99 + 29 – 99 = 29
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in the company's working capital management metrics over the observed periods.
- Average inventory processing period
- The average inventory processing period has demonstrated a consistent upward trend, increasing from 84 days in April 2021 to 99 days by July 2022. This indicates that the company is taking progressively longer to convert inventory into sales, which could suggest potential inefficiencies in inventory management or changes in inventory strategy.
- Average receivable collection period
- There has been a slight decrease in the average receivable collection period, moving from 33 days in April 2021 down to 29 days by July 2022. This trend reflects an improvement in collection efficiency, as the company is reducing the time it takes to collect payments from customers.
- Average payables payment period
- The average payable payment period has shown a steady increase from 83 days in April 2021 to 99 days in July 2022. This indicates that the company is extending the time it takes to pay its suppliers, potentially as a measure to conserve cash or manage liquidity more strategically.
- Cash conversion cycle
- The cash conversion cycle shows a fluctuating but generally declining trend up to December 2021, reaching a low of 26 days, followed by a slight increase to 29 days by mid-2022. The overall reduction suggests improved efficiency in the company's ability to convert investments in inventory and receivables into cash, despite variations in inventory and payables periods.
In summary, the company appears to be extending both its inventory processing and payables payment periods while slightly improving receivables collection efficiency. The net effect is a relatively stable and generally shortened cash conversion cycle, reflecting a balanced approach to managing working capital components.