CTS Corporation (CTS)

Working capital turnover

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Revenue (ttm) US$ in thousands 550,422 568,009 585,368 585,168 586,869 577,119 547,590 532,193 512,925 503,412 494,807 449,419 424,067 416,089 417,963 454,450 469,000 474,033 477,241 474,578
Total current assets US$ in thousands 319,349 334,324 329,877 322,644 325,760 326,397 278,550 292,045 289,089 277,449 263,344 246,636 233,231 263,683 264,795 282,978 237,478 245,029 250,419 242,225
Total current liabilities US$ in thousands 97,039 103,426 107,182 105,776 112,532 121,939 115,376 115,040 114,066 105,072 102,311 106,710 104,932 95,119 77,771 93,238 96,948 100,551 96,315 97,504
Working capital turnover 2.48 2.46 2.63 2.70 2.75 2.82 3.36 3.01 2.93 2.92 3.07 3.21 3.31 2.47 2.23 2.40 3.34 3.28 3.10 3.28

December 31, 2023 calculation

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

To analyze the working capital turnover of CTS Corp., we can observe a fluctuating trend in the ratio over the past eight quarters. The working capital turnover ratio is calculated by dividing net sales by average working capital, indicating how efficiently the company is utilizing its working capital to generate sales revenue.

In Q1 2022, the working capital turnover was at its highest point at 3.01, demonstrating that for every dollar of working capital, the company generated $3.01 in sales. This high ratio indicates strong efficiency in utilizing working capital to drive revenue.

However, there was a noticeable decrease in efficiency in Q2 2022, with the ratio dropping to 2.63. This decline continued in Q3 2022 and Q4 2022, reaching 2.46 and 2.75, respectively. The declining trend suggests that the company may have been less effective in managing its working capital during these quarters.

A significant improvement can be seen in Q2 2023, where the working capital turnover ratio increased to 3.36, reaching the highest level in the period under review. This sharp increase indicates a notable enhancement in the company's ability to generate sales revenue using available working capital efficiently.

Subsequently, in Q3 2023 and Q4 2023, the ratio slightly decreased to 2.46 and 2.48, respectively. Although the ratio dropped compared to the peak in Q2 2023, it still remained relatively stable, indicating a reasonable level of efficiency in utilizing working capital to drive sales.

Overall, the analysis of CTS Corp.'s working capital turnover ratio shows fluctuations over the quarters but suggests that the company has generally been efficient in managing its working capital to generate sales revenue, with some quarters demonstrating higher efficiency levels than others.