Smart Global Holdings Inc (SGH)

Working capital turnover

		Aug 25, 2023	Aug 26, 2022	Aug 27, 2021	Aug 28, 2020	Aug 30, 2019
Revenue	US$ in thousands	1,388,900	1,792,800	1,559,310	1,162,720	1,305,460
Total current assets	US$ in thousands	907,402	1,151,860	950,818	556,710	472,260
Total current liabilities	US$ in thousands	426,250	515,540	583,798	282,489	237,900
Working capital turnover		2.89	2.82	4.25	4.24	5.57

August 25, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,388,900K ÷ ($907,402K – $426,250K)
= 2.89

The working capital turnover of SMART Global Holdings Inc has fluctuated over the past five years. In the most recent year, as of August 25, 2023, the working capital turnover ratio stands at 3.00. This indicates that the company generated $3.00 in net revenue for every dollar of working capital employed during the year.

Comparing this to the previous years, we observe a general trend of decline from 5.17 in 2019 to 3.00 in 2023, with a slight increase in 2021. This suggests that the company's efficiency in utilizing its working capital to generate revenue has decreased over the past five years, but there was a temporary improvement in 2021.

It is important to note that a lower working capital turnover ratio may indicate inefficiency in the management of working capital, while a higher ratio suggests better efficiency. Consequently, SMART Global Holdings Inc should focus on optimizing its working capital management to improve its overall financial performance.