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.