Teradyne Inc (TER)

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	2,676,297	2,737,534	2,860,875	3,017,204	3,155,045	3,308,255	3,431,683	3,676,647	3,702,883	3,576,806	3,445,789	3,198,720	3,121,469	3,017,150	2,779,704	2,505,221	2,294,965	2,159,873	2,144,683	2,107,434
Total current assets	US$ in thousands	2,162,040	2,099,360	2,123,840	2,111,980	2,257,920	2,127,550	2,270,440	2,374,380	2,576,230	2,521,180	2,699,470	2,501,100	2,415,430	2,243,630	2,094,010	1,702,580	1,658,880	1,654,580	1,616,830	1,594,040
Total current liabilities	US$ in thousands	659,951	640,659	669,785	628,092	746,263	701,941	797,385	712,199	805,120	753,609	985,362	686,842	700,871	671,840	729,713	513,961	539,029	493,711	467,000	441,968
Working capital turnover		1.78	1.88	1.97	2.03	2.09	2.32	2.33	2.21	2.09	2.02	2.01	1.76	1.82	1.92	2.04	2.11	2.05	1.86	1.87	1.83

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,676,297K ÷ ($2,162,040K – $659,951K)
= 1.78

The working capital turnover ratio for Teradyne, Inc. has been declining over the past eight quarters, indicating a decreasing efficiency in how the company is managing its working capital to generate sales. The ratio has decreased from 2.09 in Q4 2022 to 1.78 in Q4 2023. This trend suggests that Teradyne may be taking longer to convert its working capital into revenue, which could potentially indicate inefficiencies in inventory management, accounts receivable collection, or accounts payable turnover.

It is important for Teradyne to closely monitor and improve its working capital turnover ratio to ensure optimal utilization of its current assets and liabilities. A declining ratio could signal potential cash flow issues or operational inefficiencies that need to be addressed to enhance overall financial performance and liquidity.