Photronics Inc (PLAB)

Working capital turnover

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Revenue	US$ in thousands	894,116	851,354	674,648	609,090	549,360
Total current assets	US$ in thousands	785,450	644,652	550,616	500,139	427,527
Total current liabilities	US$ in thousands	185,223	193,797	176,148	142,939	151,954
Working capital turnover		1.49	1.89	1.80	1.71	1.99

October 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $894,116K ÷ ($785,450K – $185,223K)
= 1.49

The working capital turnover ratio for Photronics, Inc. has exhibited a decreasing trend over the past five years. This ratio measures the efficiency of the company in generating revenue in relation to its working capital. A higher ratio indicates that the company is generating a higher level of sales relative to its working capital.

In 2019, the working capital turnover ratio was at its highest, standing at 2.00, which suggests that Photronics, Inc. was effectively utilizing its working capital to generate revenue. However, the ratio decreased in subsequent years, reaching 1.49 in 2023. This declining trend indicates a potential decrease in the company's efficiency in utilizing its working capital to generate sales.

The decreasing trend in the working capital turnover ratio may imply that the company's operations are becoming less efficient in generating sales relative to its working capital. It is essential for the company to closely monitor its working capital management and operational efficiency to improve this ratio and ensure effective utilization of its resources.