PDF Solutions Inc (PDFS)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	165,835	149,379	111,060	88,046	85,585
Total current assets	US$ in thousands	197,848	193,408	188,507	193,380	147,576
Total current liabilities	US$ in thousands	50,843	58,200	43,826	42,205	27,996
Working capital turnover		1.13	1.10	0.77	0.58	0.72

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $165,835K ÷ ($197,848K – $50,843K)
= 1.13

The working capital turnover ratio for PDF Solutions Inc. has fluctuated over the past five years, indicating varying efficiency in managing its working capital to generate revenue.

In 2023, the ratio increased to 1.13, showing that the company generated $1.13 in revenue for every dollar of working capital invested. This improvement suggests an enhanced ability to effectively utilize its current assets and liabilities to drive sales.

Compared to the previous year, the ratio increased from 1.10 in 2022, indicating a positive trend in the company's working capital management efficiency. The significant rise in 2023 reflects a better turnover of working capital in generating revenue.

Furthermore, the ratio has shown a general increasing trend since 2020 when it was at its lowest at 0.58. This suggests that PDF Solutions Inc. has been progressively improving its working capital turnover efficiency over the years.

The working capital turnover ratio is a key indicator of a company's operational efficiency and ability to utilize its current assets to generate revenue. The consistent improvement in this ratio for PDF Solutions Inc. signifies positive overall performance in managing its working capital effectively.