Ultra Clean Holdings Inc (UCTT)

Current ratio

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
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
Current ratio		2.88	2.82	2.42	2.71	2.22

December 31, 2023 calculation

Current ratio = Total current assets ÷ Total current liabilities
= $893,200K ÷ $310,000K
= 2.88

Ultra Clean Holdings Inc's current ratio has been showing a generally increasing trend over the past five years, from 2.22 in 2019 to 2.88 in 2023. This indicates that the company's ability to meet its short-term obligations with its current assets has strengthened over the years.

A current ratio above 1 is considered healthy, as it suggests that the company has more current assets than current liabilities to cover its short-term obligations. Ultra Clean Holdings Inc's current ratio has consistently been well above 1, which signals a strong liquidity position.

The current ratio measures the company's short-term liquidity and its ability to pay off debts in the near future. A higher current ratio indicates a better ability to meet short-term obligations. However, it is essential to analyze the components of current assets and liabilities to understand the underlying factors contributing to the current ratio's movement.

In conclusion, Ultra Clean Holdings Inc's increasing current ratio reflects a positive trend in its short-term liquidity and ability to cover immediate financial obligations.