Teradyne Inc (TER)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,676,300	3,155,040	3,702,880	3,121,470	2,294,960
Total current assets	US$ in thousands	2,162,040	2,257,920	2,576,230	2,415,430	1,658,880
Total current liabilities	US$ in thousands	659,951	746,263	805,120	700,871	539,029
Working capital turnover		1.78	2.09	2.09	1.82	2.05

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,676,300K ÷ ($2,162,040K – $659,951K)
= 1.78

The working capital turnover ratio of Teradyne, Inc. has fluctuated over the past five years. In 2023, the ratio decreased to 1.78 from 2.09 in 2022, signaling a reduction in the company's efficiency in utilizing its working capital to generate sales. This could indicate that Teradyne may have experienced challenges in efficiently managing its working capital during the year.

Comparing 2023 to 2021, the working capital turnover remained relatively stable at 2.09. It suggests that the company was able to maintain its efficiency in using working capital to support its sales levels over these two years.

In 2020 and 2019, the working capital turnover ratio was 1.82 and 2.05, respectively. The decrease in 2020 followed by a slight increase in 2019 suggests some variability in the company's management of working capital efficiency during these years.

Overall, a working capital turnover ratio above 1 indicates that Teradyne is effectively using its working capital to support its sales activities. However, the fluctuations in the ratio over the years highlight the importance of continuous monitoring and management of working capital to ensure optimal operational efficiency and financial performance.