FormFactor Inc (FORM)

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	732,076	662,117	669,597	715,987	745,371	785,746	794,842	779,014	768,638	761,607	749,597	719,290	693,331	674,206	636,585	616,428	587,310	549,284	543,314	540,417
Total current assets	US$ in thousands	573,780	506,585	478,255	480,921	474,552	516,314	537,064	556,148	524,039	506,501	497,491	498,105	487,074	456,194	455,414	426,255	419,043	389,787	347,646	338,385
Total current liabilities	US$ in thousands	131,095	129,526	124,103	128,170	149,667	163,756	159,585	154,657	148,754	160,000	153,851	146,649	154,571	136,274	123,236	117,494	136,560	141,907	102,810	100,643
Working capital turnover		1.65	1.76	1.89	2.03	2.29	2.23	2.11	1.94	2.05	2.20	2.18	2.05	2.09	2.11	1.92	2.00	2.08	2.22	2.22	2.27

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $732,076K ÷ ($573,780K – $131,095K)
= 1.65

FormFactor Inc's working capital turnover has exhibited fluctuations over the past several quarters. The working capital turnover ratio represents how efficiently the company is using its working capital to generate sales revenue. A higher turnover ratio indicates that the company is effectively managing its working capital.

From the data provided, it can be observed that the working capital turnover ratio has generally been above 2.0, indicating that FormFactor Inc has been able to efficiently convert its working capital into sales. There was a peak in efficiency in the first quarter of 2019, with a ratio of 2.27, and the ratio has generally remained above 2.0 since then, apart from a few quarters.

However, there has been some variability in the ratio over the quarters, with fluctuations between 1.65 and 2.29. This may suggest changes in the company's operating cycle or the effectiveness of its working capital management strategies during those periods.

In conclusion, while FormFactor Inc has, for the most part, demonstrated efficient utilization of its working capital, it may benefit from assessing the reasons behind the fluctuations in the working capital turnover ratio to ensure sustained operational efficiency and financial health.