Analog Devices Inc (ADI)

Working capital turnover

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Revenue (ttm)	US$ in thousands	11,300,180	12,053,800	12,591,670	12,643,210	12,366,050	11,809,200	10,683,340	9,383,500	8,122,390	7,048,520	6,456,420	6,153,710	5,809,360	5,554,460	5,469,200	5,493,200	5,702,740	5,940,280	6,144,430	6,236,970
Total current assets	US$ in thousands	4,415,880	4,384,020	4,835,180	4,744,920	5,161,500	4,937,990	4,689,710	4,634,190	4,636,700	5,378,320	3,090,460	2,902,800	2,624,740	2,517,690	2,485,240	2,051,290	1,911,180	1,985,130	2,007,060	2,080,490
Total current liabilities	US$ in thousands	2,923,370	3,200,970	2,831,020	2,646,410	2,433,680	2,442,660	2,441,200	2,326,210	2,221,910	2,770,310	2,793,340	2,776,830	1,676,760	1,364,990	1,687,780	1,582,000	1,770,540	1,508,630	1,483,680	1,365,040
Working capital turnover		7.57	10.19	6.28	6.02	4.53	4.73	4.75	4.07	3.36	2.70	21.73	48.85	6.13	4.82	6.86	11.71	40.55	12.47	11.74	8.72

February 3, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $11,300,180K ÷ ($4,415,880K – $2,923,370K)
= 7.57

The working capital turnover for Analog Devices Inc. has shown some fluctuations over the past eight quarters. The ratio, which measures how efficiently a company utilizes its working capital to generate sales, ranged from a low of 4.23 in Q2 2022 to a high of 10.40 in Q4 2023.

A higher working capital turnover ratio indicates that the company is able to generate more sales with less investment in working capital, which is generally a positive sign of operational efficiency. In the case of Analog Devices Inc., the substantial increase from 4.81 in Q4 2022 to 10.40 in Q4 2023 suggests a significant improvement in how efficiently the company is utilizing its working capital to drive sales.

On the other hand, the fluctuations in the ratio over the quarters may indicate variability in the company's working capital management. It could be beneficial for the company to analyze the reasons behind these fluctuations and work towards maintaining more consistent efficiency in utilizing its working capital to generate sales in the long term.

Overall, the recent trend of increasing working capital turnover for Analog Devices Inc. indicates improved operational efficiency, but continued monitoring and analysis of working capital management practices would be beneficial for sustained performance.