Ichor Holdings Ltd (ICHR)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.34 | 4.20 | 4.28 | 6.46 | 4.75 |
| Receivables turnover | 11.87 | 9.31 | 7.62 | 8.97 | 7.19 |
| Payables turnover | 13.58 | 10.82 | 6.33 | 7.46 | 4.59 |
| Working capital turnover | 2.62 | 3.66 | 4.28 | 2.71 | 5.40 |
Ichor Holdings Ltd's activity ratios provide valuable insights into the efficiency of the company's operations.
1. Inventory turnover: The trend for inventory turnover shows a fluctuation over the years, with a decreasing trend from 6.46 in 2020 to 3.34 in 2023. This suggests that the company is selling and replacing its inventory at a slower rate in recent years.
2. Receivables turnover: The receivables turnover ratio has been increasing steadily over the years, indicating that the company is collecting its accounts receivable more efficiently. The ratio rose from 7.19 in 2019 to 11.87 in 2023, signifying improved collection efforts.
3. Payables turnover: The payables turnover ratio also shows an upward trend, suggesting that the company is paying its suppliers more promptly. The ratio increased from 4.59 in 2019 to 13.58 in 2023, indicating more efficient management of payables.
4. Working capital turnover: The working capital turnover ratio reflects the efficiency of the company in generating sales relative to working capital. The ratio has fluctuated over the years, with a peak at 5.40 in 2019 and a low of 2.62 in 2023. This indicates a varying level of efficiency in utilizing working capital to generate revenue.
In summary, while the company has shown improvement in collecting receivables and managing payables over the years, there are fluctuations in inventory turnover and working capital turnover ratios, suggesting areas for further analysis and potential operational efficiency improvements.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 109.23 | 86.87 | 85.23 | 56.52 | 76.82 |
| Days of sales outstanding (DSO) | days | 30.76 | 39.21 | 47.89 | 40.70 | 50.75 |
| Number of days of payables | days | 26.87 | 33.74 | 57.65 | 48.93 | 79.56 |
The activity ratios of Ichor Holdings Ltd provide insights into the efficiency of the company's operations and management of working capital.
1. Days of Inventory on Hand (DOH):
- The trend in DOH indicates the number of days it takes for the company to sell its inventory.
- Over the past five years, the DOH has shown fluctuations, ranging from a low of 56.52 days in 2020 to a high of 109.23 days in 2023.
- A decreasing trend in DOH suggests that the company is managing its inventory efficiently, while an increasing trend may indicate potential issues such as overstocking.
2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes for the company to collect payments after making sales.
- The trend in DSO for Ichor Holdings Ltd has shown variations, with a range from 30.76 days in 2023 to 50.75 days in 2019.
- A lower DSO is generally favorable as it indicates a faster collection of receivables, improving cash flow and liquidity.
3. Number of Days of Payables:
- This ratio reflects the average number of days it takes for the company to pay its suppliers.
- Ichor Holdings Ltd has experienced fluctuations in the number of days of payables, ranging from 26.87 days in 2023 to 79.56 days in 2019.
- A longer period of payables may suggest a better cash management strategy, as it allows the company to hold onto cash for a longer duration before paying suppliers.
Overall, by analyzing these activity ratios over the years, it appears that the company has been actively managing its inventory, receivables, and payables to optimize its working capital efficiency. Monitoring these ratios can help assess the company's operational effectiveness and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 8.54 | 12.94 | 12.79 | 21.66 | 13.70 |
| Total asset turnover | 0.84 | 1.17 | 1.07 | 1.17 | 1.08 |
The fixed asset turnover ratio for Ichor Holdings Ltd has shown fluctuating trends over the past five years. In 2023, the ratio decreased to 8.54 from its peak in 2020 of 21.66, indicating that the company generated $8.54 in sales for every $1 invested in fixed assets. This decrease suggests a potential decrease in efficiency in utilizing fixed assets to generate revenue.
On the other hand, the total asset turnover ratio has also seen fluctuations but has generally remained stable over the years. In 2023, the ratio stood at 0.84, indicating that the company generated $0.84 in sales for every $1 invested in total assets. This implies that Ichor Holdings is not efficiently generating revenue from its total asset base.
Overall, the long-term activity ratios suggest that Ichor Holdings Ltd may need to focus on improving the efficiency of utilizing both fixed assets and total assets to generate sales revenue effectively. Monitoring these ratios over time can help assess the company's operational efficiency and asset utilization strategies.