Silicon Laboratories Inc (SLAB)

Working capital turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Revenue (ttm) US$ in thousands 584,386 504,982 542,347 641,846 782,258 952,738 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
Total current assets US$ in thousands 602,033 614,136 600,046 646,120 737,931 773,535 820,977 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
Total current liabilities US$ in thousands 97,883 118,305 100,113 111,359 163,570 165,143 218,546 693,331 185,776 205,701 232,119 246,208 668,827 458,375 154,882 150,799 284,498 151,146 135,000 446,733
Working capital turnover 1.16 1.02 1.08 1.20 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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $584,386K ÷ ($602,033K – $97,883K)
= 1.16

Silicon Laboratories Inc's working capital turnover has exhibited fluctuations over the past few years, indicating changes in the efficiency of its working capital management. The working capital turnover ratio measures the company's ability to generate revenue from its working capital, which includes current assets and current liabilities.

From March 31, 2020, to December 31, 2021, the working capital turnover decreased steadily from 1.08 to 0.46, suggesting a decline in the company's efficiency in utilizing its working capital to generate sales. This downward trend could be a concern as it may signal inefficiencies in inventory management, cash flow, or collection of receivables.

However, there was a notable improvement in the working capital turnover ratio from March 31, 2022, to June 30, 2024, where it increased gradually from 0.42 to 1.08. This uptrend indicates that Silicon Laboratories Inc became more effective in leveraging its working capital to drive revenue growth during this period.

The working capital turnover reaching 1.69 on June 30, 2023, was particularly noteworthy as it signified a peak in efficiency. Subsequently, the ratio stabilized around 1.00, implying that the company was able to maintain its improved working capital management practices.

Overall, the variations in Silicon Laboratories Inc's working capital turnover ratio reflect fluctuations in how efficiently the company was utilizing its working capital to support its operations and generate sales revenue during the analyzed period.