Ichor Holdings Ltd (ICHR)

Activity ratios

Short-term

Turnover ratios

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
Inventory turnover 3.30 3.31 3.78 4.13 4.17 4.03 3.75 3.95 4.26 4.98 5.66 6.22 6.42 5.94 5.05 4.72 4.72 5.21 5.21 5.71
Receivables turnover 11.87 8.62 10.98 9.77 9.31 6.86 — — 7.62 8.61 8.50 8.75 8.97 8.16 7.40 7.91 7.19 7.29 14.02 12.86
Payables turnover 13.42 11.94 15.74 16.50 10.74 8.25 7.38 7.30 6.30 7.00 6.28 6.37 7.41 7.59 6.37 5.70 4.56 6.34 9.44 10.07
Working capital turnover 2.62 2.65 3.04 3.41 3.66 3.80 3.86 4.21 4.28 2.84 2.95 2.97 2.71 4.77 4.79 5.40 5.40 5.45 5.28 6.02

Ichor Holdings Ltd has shown consistent performance in managing its inventory turnover ratio over the past five years, with a gradual increase from 3.30 in December 2019 to 5.71 in December 2020, before stabilizing around 5.21 in the most recent period. This indicates that the company is efficiently managing its inventory levels and turning over its inventory nearly five times a year on average.

In terms of receivables turnover, Ichor Holdings Ltd has demonstrated fluctuating performance over the same period. While the ratio reached its peak at 14.02 in March 2019, it has since shown some volatility, with a downward trend leading to a ratio of 8.97 in December 2021, before recovering slightly to 11.87 in December 2023. This suggests that the company may have faced challenges in efficiently collecting its receivables in recent years.

Looking at payables turnover, Ichor Holdings Ltd has exhibited a generally increasing trend in managing its payables, with the ratio steadily growing from 4.56 in December 2019 to 16.50 in March 2023. However, there was a slight decline to 13.42 in December 2023, indicating that the company may be taking longer to pay its suppliers compared to the previous period.

Analyzing the working capital turnover ratio, Ichor Holdings Ltd has maintained a relatively stable performance over the past five years. The ratio has hovered around 5.00, indicating that the company is effectively utilizing its working capital to generate revenue. The slight fluctuations in the ratio suggest reasonable efficiency in managing working capital to support the company's operations.

Overall, Ichor Holdings Ltd has shown some strengths in managing its inventory and working capital turnover ratios efficiently. However, there are areas for improvement, particularly in managing receivables and payables turnover ratios to ensure better cash flow management and overall operational efficiency.

Average number of days

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
Days of inventory on hand (DOH) days 110.57 110.25 96.64 88.29 87.52 90.67 97.26 92.35 85.67 73.26 64.53 58.68 56.89 61.44 72.26 77.32 77.36 70.06 70.11 63.95
Days of sales outstanding (DSO) days 30.76 42.36 33.25 37.36 39.21 53.25 — — 47.89 42.39 42.96 41.73 40.70 44.74 49.35 46.14 50.75 50.09 26.03 28.38
Number of days of payables days 27.20 30.57 23.19 22.12 33.99 44.27 49.46 50.01 57.95 52.12 58.16 57.30 49.25 48.07 57.28 64.06 80.12 57.57 38.67 36.23

Ichor Holdings Ltd's activity ratios indicate the efficiency of the company's operations in managing its inventory, collecting receivables, and paying its suppliers.

1. Days of Inventory on Hand (DOH): The trend in DOH shows an increase over the past few quarters, indicating that Ichor has been holding inventory for a longer period. This may suggest some issues in managing inventory levels efficiently, which could tie up capital and potentially lead to increased storage costs.

2. Days of Sales Outstanding (DSO): The DSO ratio fluctuates but generally shows an acceptable level of efficiency in collecting receivables. However, the significant increase in DSO between Mar 31, 2019, and Dec 31, 2019, followed by a decrease, warrants further investigation to understand the reasons behind these fluctuations.

3. Number of Days of Payables: The company has been steadily decreasing the number of days it takes to pay its suppliers, which could potentially strain relationships with suppliers if the trend continues. The reduction in payables days indicates a faster payment cycle, which may be a strategic move to maintain good supplier relations or negotiate better terms.

In conclusion, Ichor Holdings Ltd should focus on optimizing its inventory management to reduce DOH, monitor receivables closely to maintain a steady DSO, and balance its payables days to ensure healthy relationships with suppliers while managing cash flow effectively.

Long-term

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
Fixed asset turnover 8.54 9.25 10.63 11.81 12.94 13.15 12.72 13.01 12.79 19.74 19.32 20.29 21.66 19.06 17.00 15.57 13.70 13.05 13.42 15.77
Total asset turnover 0.84 0.90 1.05 1.15 1.17 1.14 1.09 1.10 1.07 1.26 1.23 1.22 1.17 1.40 1.30 1.23 1.08 1.11 1.19 1.40

Ichor Holdings Ltd's fixed asset turnover has generally shown a decreasing trend over the past few quarters, indicating decreasing efficiency in generating sales from its fixed assets. However, the fixed asset turnover remains relatively high, with values ranging from 8.54 to 21.66, suggesting that the company is still able to generate significant revenue from its investment in fixed assets.

On the other hand, the total asset turnover of Ichor Holdings Ltd has fluctuated over the same period, with values ranging from 0.84 to 1.40. This ratio demonstrates the company's overall efficiency in generating sales from all its assets, including both fixed and current assets. The gradual increase from 0.84 to 1.40 suggests an improvement in the company's ability to utilize its total assets to generate revenue.

Overall, while the fixed asset turnover shows some inconsistency, Ichor Holdings Ltd's total asset turnover has shown an upward trend, indicating improving efficiency in utilizing its assets to generate sales. It is important for the company to continue monitoring and optimizing its asset turnover ratios to ensure sustainable growth and profitability.