Ultra Clean Holdings Inc (UCTT)

Fixed asset turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,734,500	2,374,300	2,101,600	1,398,600	1,066,200
Property, plant and equipment	US$ in thousands	328,300	279,600	242,300	159,200	145,300
Fixed asset turnover		5.28	8.49	8.67	8.79	7.34

December 31, 2023 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $1,734,500K ÷ $328,300K
= 5.28

Ultra Clean Holdings Inc's fixed asset turnover ratio has shown a decreasing trend over the past five years. The ratio was at its highest in 2020 at 8.79 and has since declined to 5.28 in 2023. This indicates that the company is generating $5.28 in revenue for every $1 invested in fixed assets in 2023, compared to $8.79 in 2020.

A decreasing fixed asset turnover ratio could suggest that the company may be experiencing inefficiencies or underutilization of its fixed assets in generating revenue. This trend could potentially signal that the company is not efficiently utilizing its fixed assets to generate sales, which may raise concerns about the company's operational efficiency and profitability.

Further investigation into the reasons behind the decline in fixed asset turnover would be necessary to assess the impact on the company's overall financial performance and operational effectiveness.