Diodes Incorporated (DIOD)

Working capital turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Revenue (ttm) US$ in thousands 1,311,120 1,294,521 1,349,089 1,496,470 1,661,739 1,835,252 1,951,878 1,985,698 2,000,580 1,984,539 1,934,688 1,874,164 1,805,162 1,675,361 1,513,398 1,361,619 1,229,215 1,180,002 1,194,217 1,227,554
Total current assets US$ in thousands 1,224,150 1,262,440 1,220,460 1,201,230 1,187,380 1,182,580 1,160,390 1,121,770 1,161,670 1,276,560 1,214,610 1,152,090 1,187,670 1,063,880 1,042,480 1,050,350 1,023,990 1,214,690 1,126,480 796,446
Total current liabilities US$ in thousands 375,596 352,783 360,955 377,279 393,498 414,907 412,956 390,346 432,530 511,541 499,977 463,493 471,034 444,625 460,205 432,838 509,762 321,533 325,335 264,117
Working capital turnover 1.55 1.42 1.57 1.82 2.09 2.39 2.61 2.71 2.74 2.59 2.71 2.72 2.52 2.71 2.60 2.21 2.39 1.32 1.49 2.31

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,311,120K ÷ ($1,224,150K – $375,596K)
= 1.55

Diodes Incorporated's working capital turnover ratio has fluctuated over the analyzed period. The ratio measures the company's ability to efficiently utilize its working capital to generate sales revenue. In March 2020, the working capital turnover was 2.31, indicating that Diodes converted its working capital into sales 2.31 times during the year.

The ratio decreased by June 2020 to 1.49, signaling a decline in the efficiency of working capital management. This trend continued until December 2020 when the ratio improved to 2.39, suggesting a better utilization of working capital leading to higher sales.

From March 2021 to September 2022, the working capital turnover ratio remained relatively stable, ranging between 2.21 to 2.74. This indicates that Diodes consistently converted its working capital into sales at a relatively efficient rate during this period.

However, the ratio started declining from March 2023 to December 2024, reaching a low of 1.42 in September 2024. This downward trend suggests potential challenges in effectively leveraging working capital for generating sales revenue during this period.

In conclusion, while the working capital turnover ratio of Diodes Incorporated has shown fluctuations, it is essential for the company to focus on efficiently managing its working capital to support sustainable growth and profitability in the future.