Harmonic Inc (HLIT)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 603,758 | 619,917 | 501,650 | 359,569 | 385,878 |
| Total current assets | US$ in thousands | 330,732 | 345,299 | 323,127 | 238,035 | 251,362 |
| Total current liabilities | US$ in thousands | 272,394 | 322,072 | 224,461 | 147,295 | 191,899 |
| Working capital turnover | 10.35 | 26.69 | 5.08 | 3.96 | 6.49 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $603,758K ÷ ($330,732K – $272,394K)
= 10.35
Harmonic, Inc.'s working capital turnover has fluctuated over the past five years. The working capital turnover ratio indicates how efficiently the company is utilizing its working capital to generate sales. A higher ratio is generally preferred as it suggests that the company is generating more revenue per unit of working capital.
In 2023, the working capital turnover ratio decreased significantly to 10.42 from the previous year's high of 26.91 in 2022. This sharp decline may indicate a less efficient use of working capital to generate sales compared to the previous year.
In 2021, the working capital turnover ratio was relatively low at 5.14, suggesting that the company may have faced challenges in effectively using its working capital to drive sales. However, there was an improvement in 2020, with a ratio of 4.17, indicating a better utilization of working capital compared to 2021.
In 2019, Harmonic, Inc. had a working capital turnover ratio of 6.78, showing a moderate level of efficiency in converting working capital into sales.
Overall, Harmonic, Inc. should aim to consistently monitor and improve its working capital turnover to ensure optimal utilization of working capital resources and enhance its financial performance.
Peer comparison
Dec 31, 2023