Silicon Laboratories Inc (SLAB)

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	782,258	952,738	1,018,795	1,037,079	1,024,106	975,461	890,475	796,817	720,860	658,009	605,909	550,767	607,787	681,396	771,959	864,318	837,554	833,650	840,599	850,996
Total current assets	US$ in thousands	737,931	773,535	820,977	1,460,740	1,461,360	1,625,640	1,709,960	2,123,400	2,238,570	2,920,150	1,161,000	860,931	975,821	937,649	917,437	1,248,040	943,859	895,166	847,642	814,488
Total current liabilities	US$ in thousands	163,570	165,143	218,546	693,331	185,776	205,701	232,119	246,208	668,827	458,375	154,882	150,799	284,498	151,146	135,000	446,733	137,701	132,036	131,037	134,755
Working capital turnover		1.36	1.57	1.69	1.35	0.80	0.69	0.60	0.42	0.46	0.27	0.60	0.78	0.88	0.87	0.99	1.08	1.04	1.09	1.17	1.25

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $782,258K ÷ ($737,931K – $163,570K)
= 1.36

The working capital turnover for Silicon Laboratories Inc has shown some fluctuations over the past few years. It started at a low of 0.25 in March 2019, gradually increasing to reach a peak of 1.69 in June 2023. The ratio measures how efficiently the company is utilizing its working capital to generate sales revenue.

A higher working capital turnover generally indicates that the company is effectively managing its working capital (current assets minus current liabilities) to support its operations and sales. A rising trend in the ratio can signify improved operational efficiency and smoother cash flow cycles.

On the other hand, a lower working capital turnover may suggest inefficiencies in managing working capital, potentially leading to excess inventory, slow collection of receivables, or inadequate cash reserves.

It is important for Silicon Laboratories Inc to closely monitor its working capital turnover and ensure it is optimized to support its business activities effectively. Additionally, comparing the ratio to industry benchmarks or historical performance can provide further insights into the company's financial health and operational efficiency.