Ichor Holdings Ltd (ICHR)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	791,741	1,269,010	1,089,730	905,509	610,190
Total current assets	US$ in thousands	401,365	513,458	462,771	495,714	276,947
Total current liabilities	US$ in thousands	98,962	166,292	208,303	162,034	163,867
Working capital turnover		2.62	3.66	4.28	2.71	5.40

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $791,741K ÷ ($401,365K – $98,962K)
= 2.62

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. The trend analysis of Ichor Holdings Ltd’s working capital turnover over the past five years shows fluctuations.

In 2023, the working capital turnover ratio decreased to 2.62 from 3.66 in 2022, indicating a decline in the company's efficiency in utilizing its working capital to generate sales. This could imply that the company may be facing challenges in managing its working capital effectively or experiencing a decrease in sales relative to its working capital.

Comparing this to the high of 5.40 in 2019, the sharp decline to 2.62 in 2023 is significant and may warrant further investigation. It suggests that Ichor Holdings Ltd may be facing operational challenges that are impacting its ability to efficiently convert working capital into sales.

Overall, the downward trend in the working capital turnover ratio over the past five years for Ichor Holdings Ltd indicates a potential decline in operational efficiency or sales performance, which could require management attention to improve the company's working capital management practices.