CTS Corporation (CTS)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	550,422	586,869	512,925	424,066	468,999
Total current assets	US$ in thousands	319,349	325,760	289,089	233,231	237,478
Total current liabilities	US$ in thousands	97,039	112,532	114,066	104,932	96,948
Working capital turnover		2.48	2.75	2.93	3.31	3.34

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $550,422K ÷ ($319,349K – $97,039K)
= 2.48

The working capital turnover of CTS Corp. has shown a declining trend over the past five years. The ratio decreased from 3.34 in 2019 to 2.48 in 2023. This suggests that the company may be becoming less efficient in managing its working capital to generate sales revenue.

A working capital turnover ratio of less than 1 indicates that the company is not effectively utilizing its working capital to support its operations and generate sales. In this case, the ratios are consistently above 1, suggesting that CTS Corp. is using its working capital efficiently, though the decreasing trend raises concerns.

Overall, the decreasing trend in the working capital turnover ratio may indicate potential issues with inventory management, accounts receivable collection, or accounts payable management. It is crucial for the company to closely monitor and address these areas to improve efficiency in utilizing its working capital resources.