Ultra Clean Holdings Inc (UCTT)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.89 | 4.30 | 4.41 | 6.14 | 5.04 |
| Receivables turnover | 9.59 | 9.36 | 8.40 | 9.61 | 9.46 |
| Payables turnover | 7.55 | 7.53 | 5.02 | 9.12 | 6.53 |
| Working capital turnover | 2.97 | 3.35 | 3.15 | 4.07 | 4.16 |
Ultra Clean Holdings Inc has shown a decreasing trend in inventory turnover over the past five years, indicating that the company is holding onto its inventory for a longer period before selling it. This may suggest inefficiencies in inventory management or potential challenges in selling products efficiently.
On the other hand, the receivables turnover has remained relatively stable over the years, indicating that the company is collecting receivables at a consistent pace. This implies that Ultra Clean Holdings Inc has been successful in managing its accounts receivable effectively.
Payables turnover has shown fluctuation over the years, with a significant increase in 2022 and a subsequent decrease in 2023. This volatility may reflect changes in the company's payment terms with suppliers or alterations in its procurement strategies.
The working capital turnover ratio has also shown a decreasing trend over the past five years, suggesting that Ultra Clean Holdings Inc is generating less revenue for each dollar of working capital. This could indicate potential inefficiencies in utilizing working capital or a decrease in revenue generation relative to the capital invested.
Overall, while the company has exhibited consistent performance in receivables turnover, there are areas such as inventory turnover and working capital turnover where Ultra Clean Holdings Inc may need to focus on improving operational efficiency and effectiveness.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 93.80 | 84.86 | 82.80 | 59.49 | 72.38 |
| Days of sales outstanding (DSO) | days | 38.05 | 39.00 | 43.44 | 37.97 | 38.58 |
| Number of days of payables | days | 48.32 | 48.46 | 72.69 | 40.00 | 55.88 |
Ultra Clean Holdings Inc's Days of Inventory on Hand (DOH) has shown an increasing trend over the past five years, from 72.38 days in 2019 to 93.80 days in 2023. This indicates that the company is holding inventory for a longer period, which could tie up capital and increase carrying costs.
On the other hand, the Days of Sales Outstanding (DSO) have fluctuated slightly over the same period, with a slight decrease from 38.58 days in 2019 to 38.05 days in 2023. This suggests that the company is collecting its receivables at a relatively stable pace.
The Number of Days of Payables has also varied significantly, from 55.88 days in 2019 to 48.32 days in 2023. A lower number of days of payables indicates that the company is paying its suppliers more quickly, which could signal strong relationships with vendors but may also indicate potential cash flow challenges.
Overall, the activity ratios suggest that Ultra Clean Holdings Inc may need to focus on managing its inventory more efficiently to improve working capital management and financial performance.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 5.28 | 8.49 | 8.67 | 8.79 | 7.34 |
| Total asset turnover | 0.93 | 1.21 | 1.04 | 1.27 | 1.05 |
Ultra Clean Holdings Inc's long-term activity ratios indicate the efficiency with which the company is utilizing its assets to generate sales. The fixed asset turnover has shown a declining trend from 2019 to 2023, with a value of 5.28 in 2023 compared to 7.34 in 2019. This decrease suggests a decrease in the company's ability to generate sales using its fixed assets over the years.
On the other hand, the total asset turnover ratio has also shown a declining trend over the same period, indicating a decrease in the company's overall ability to generate sales using all its assets. The total asset turnover ratio stood at 0.93 in 2023, down from 1.05 in 2019.
Overall, the declining trend in both fixed asset turnover and total asset turnover ratios suggests that Ultra Clean Holdings Inc may be facing challenges in efficiently utilizing its assets to generate sales, which could impact its long-term profitability and operational efficiency. Further analysis of the company's asset management practices and operational strategies may be required to address these declining ratios and enhance efficiency in asset utilization.