Sitime Corporation (SITM)

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
Revenue (ttm)	US$ in thousands	143,994	162,430	200,005	251,695	283,605	298,507	288,441	253,519	218,808	183,341	152,979	129,956	116,156	103,971
Total current assets	US$ in thousands	623,242	666,901	662,977	666,544	669,067	662,208	660,779	637,748	625,943	323,054	302,557	297,699	113,180	105,353
Total current liabilities	US$ in thousands	121,394	31,280	30,462	25,206	33,794	35,004	43,617	34,073	37,385	33,436	23,739	21,740	19,145	17,565
Working capital turnover		0.29	0.26	0.32	0.39	0.45	0.48	0.47	0.42	0.37	0.63	0.55	0.47	1.24	1.18

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $143,994K ÷ ($623,242K – $121,394K)
= 0.29

Working capital turnover is an efficiency ratio that measures how effectively a company is utilizing its working capital to generate revenue.

Based on the data provided for SiTime Corp, we observe that the working capital turnover has been fluctuating over the past eight quarters. The ratio has ranged from a low of 0.26 in Q3 2023 to a high of 0.48 in Q3 2022.

A decreasing trend in the working capital turnover ratio, such as the decline from Q1 2023 to Q4 2023, may indicate that the company is taking longer to convert its working capital into sales revenue. This could imply inefficiencies in managing inventory, accounts receivable, or accounts payable.

Conversely, an increasing trend in the ratio, as seen from Q4 2022 to Q2 2023, suggests that SiTime Corp has been improving its working capital management efficiency. A higher turnover ratio typically indicates that the company is generating more revenue per unit of working capital employed.

Overall, fluctuations in the working capital turnover ratio should be further analyzed in conjunction with other financial metrics to assess the company's overall financial health and operational efficiency.