ON Semiconductor Corporation (ON)

Working capital turnover

		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
Revenue (ttm)	US$ in thousands	8,253,000	8,338,500	8,350,300	8,340,900	8,326,200	8,068,700	7,618,200	7,203,100	6,739,800	6,340,000	5,915,200	5,458,800	5,255,000	5,210,500	5,275,000	5,409,200	5,517,900	5,619,200	5,779,100	5,887,300
Total current assets	US$ in thousands	5,912,300	6,085,400	5,930,200	5,716,300	5,729,400	5,309,400	4,785,300	4,367,400	3,781,600	3,641,800	3,229,900	3,187,600	3,184,100	3,812,600	4,144,400	4,032,300	3,020,000	3,073,000	3,064,200	3,046,700
Total current liabilities	US$ in thousands	2,183,600	2,494,800	2,480,700	2,580,000	2,061,400	1,761,000	1,713,300	1,566,100	1,543,400	1,444,100	1,455,100	1,730,000	1,674,500	1,803,100	1,764,600	1,736,100	1,818,400	2,001,600	1,266,800	1,317,500
Working capital turnover		2.21	2.32	2.42	2.66	2.27	2.27	2.48	2.57	3.01	2.88	3.33	3.75	3.48	2.59	2.22	2.36	4.59	5.24	3.22	3.40

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $8,253,000K ÷ ($5,912,300K – $2,183,600K)
= 2.21

Working capital turnover measures how efficiently a company utilizes its working capital to generate revenue. It is calculated by dividing net sales by average working capital. Looking at the data provided for ON Semiconductor Corp., the working capital turnover has shown some fluctuation over the past eight quarters.

From Q4 2022 to Q1 2023, there was a significant increase in the working capital turnover from 2.27 to 2.66, indicating that the company was able to generate more revenue per unit of working capital during that period. However, in the following quarters, Q2 to Q4 2023, the working capital turnover showed a slight declining trend, reaching its lowest point of 2.21 in Q4 2023.

Overall, ON Semiconductor Corp. has maintained a relatively stable working capital turnover ratio above 2.0, which suggests that the company efficiently manages its working capital to support its operations and generate revenue. However, the recent decrease in the ratio may indicate a potential need for the company to reassess its working capital management strategies to maintain or improve its efficiency in the future.