Ichor Holdings Ltd (ICHR)

Short-term

Turnover ratios

Ichor Holdings Ltd's activity ratios provide insights into how efficiently the company manages its working capital components.

1. Inventory turnover: Over the observed period, the inventory turnover ratio varied from a high of 5.86 in December 31, 2020, to a low of 2.88 in December 31, 2023. This indicates that, on average, inventory is turned over 2.88 to 5.86 times per year. A higher turnover ratio suggests efficient inventory management and quicker sales, while a decreasing ratio may signal inventory management issues or slower sales.

2. Receivables turnover: There is a lack of data provided for the receivables turnover ratio, which would have indicated how quickly the company collects payments from its customers. Without this data, it is challenging to assess the efficiency of Ichor's accounts receivable management.

3. Payables turnover: Similarly, data for the payables turnover ratio is not available, which would have shed light on how long Ichor takes to pay its suppliers. Without this information, it is difficult to analyze the efficiency of the company's accounts payable management.

4. Working capital turnover: The working capital turnover ratio presents how effectively the company utilizes its working capital to generate sales. Ichor's working capital turnover ratio fluctuated over the period, ranging from 2.46 in March 31, 2024, to 5.48 in March 31, 2020. A higher turnover ratio is generally preferable as it indicates efficient use of working capital to generate revenue.

In summary, while Ichor Holdings Ltd has shown varying levels of efficiency in managing its inventory and working capital over the observation period, a lack of data for receivables and payables turnover ratios limits a comprehensive analysis of the company's overall activity efficiency.

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Average number of days

Based on the provided data for Ichor Holdings Ltd, let's analyze the activity ratios:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have fluctuated over the years, with a general trend of increase observed from 86.26 days as of March 31, 2020, to 121.73 days by December 31, 2024.
- A higher number of days of inventory on hand indicates that the company is holding onto inventory for a longer period, which may tie up cash flow and lead to potential obsolescence or storage costs.
- The increase in DOH over time may suggest inefficiencies in inventory management or declining sales.

2. Days of Sales Outstanding (DSO):
- Unfortunately, no specific data is available for Days of Sales Outstanding (DSO) for the company in the provided dataset.
- DSO is a crucial metric that measures how long it takes for a company to collect payment after a sale. A lower DSO typically indicates better liquidity and efficient accounts receivable management.

3. Number of Days of Payables:
- Similar to DSO, data on the number of days of payables is not provided in the dataset.
- This ratio is an important indicator of how long it takes for a company to pay its suppliers. A longer payable period can help improve cash flow management, but it may also strain supplier relationships if extended too far.

In conclusion, while insights on the days of inventory on hand were obtained, the absence of data on DSO and payables limits a comprehensive analysis of Ichor Holdings Ltd's activity ratios. It is recommended to track all these activity ratios regularly to assess the company's operational efficiency, liquidity, and overall financial health.

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Long-term

Ichor Holdings Ltd's fixed asset turnover ratio measures the efficiency of the company in generating sales revenue from its investment in fixed assets. The trend of the fixed asset turnover ratio shows fluctuations over time, with a peak in December 2020 at 21.87 and a subsequent decline. The ratio saw a notable decrease to 9.54 in December 2021 before gradually recovering to 13.05 by December 2022. In the latest available data, the fixed asset turnover ratio stood at 11.95 as of March 31, 2023, indicating a moderate decline in the company's efficiency in utilizing fixed assets to generate sales revenue.

On the other hand, the total asset turnover ratio reflects Ichor Holdings Ltd's ability to generate sales from all its assets. The ratio experienced fluctuations throughout the period, with a peak of 1.42 in September 2020 and a low of 0.82 by March 31, 2024. The trend overall suggests a decline in the company's effectiveness in utilizing its total assets to generate sales revenue over the years.

Overall, the analysis of Ichor Holdings Ltd's long-term activity ratios indicates a mixed performance in terms of asset utilization efficiency, highlighting the need for the company to continuously monitor and improve its operational efficiency and asset management strategies to optimize its financial performance.