Ultra Clean Holdings Inc (UCTT)

Working capital 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
Total current assets	US$ in thousands	893,200	1,098,800	1,137,100	545,100	467,000
Total current liabilities	US$ in thousands	310,000	389,200	469,100	201,200	210,600
Working capital turnover		2.97	3.35	3.15	4.07	4.16

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,734,500K ÷ ($893,200K – $310,000K)
= 2.97

Ultra Clean Holdings Inc's working capital turnover ratio has been fluctuating over the past five years, ranging from 2.97 to 4.16. This ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue. A higher turnover ratio signifies that the company is effectively managing its working capital and converting it into sales.

In 2020 and 2019, Ultra Clean Holdings Inc had the highest working capital turnover ratios of 4.07 and 4.16, respectively. This suggests that the company was able to generate a higher level of sales revenue relative to its working capital in those years.

However, in 2023, the working capital turnover ratio decreased to 2.97, indicating a decrease in efficiency in utilizing working capital to generate sales revenue compared to the previous year. This could be a cause for concern as it may suggest inefficiencies in managing working capital or a decrease in sales generated from the available working capital.

Overall, the fluctuating trend in Ultra Clean Holdings Inc's working capital turnover ratio over the years highlights the importance of closely monitoring working capital management practices to ensure optimal efficiency in generating sales revenue.