Ultra Clean Holdings Inc (UCTT)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.88 | 3.15 | 3.18 | 3.13 | 2.82 | 2.79 | 2.81 | 2.69 | 2.42 | 2.56 | 2.81 | 2.42 | 2.71 | 2.63 | 2.49 | 2.48 | 2.22 | 2.72 | 2.93 | 3.03 |
| Quick ratio | 1.57 | 1.75 | 1.70 | 1.63 | 1.57 | 1.69 | 1.07 | 0.88 | 1.53 | 1.68 | 1.86 | 1.64 | 1.72 | 1.65 | 1.56 | 1.51 | 1.31 | 1.65 | 1.08 | 1.70 |
| Cash ratio | 0.99 | 1.16 | 1.09 | 1.03 | 0.92 | 1.11 | 1.07 | 0.88 | 0.99 | 1.11 | 1.27 | 1.00 | 1.00 | 0.90 | 0.94 | 0.98 | 0.77 | 0.98 | 1.08 | 0.99 |
Ultra Clean Holdings Inc's liquidity ratios have shown fluctuations over the past five years. The current ratio has generally been above 2, indicating that the company has sufficient current assets to meet its short-term obligations. The ratio improved in the most recent quarter compared to the same quarter in the prior year.
The quick ratio, which excludes inventory from current assets, also generally reflects a healthy liquidity position for the company. However, there have been fluctuations, with a notable spike in the quick ratio in the second quarter of 2022, possibly due to a decrease in current liabilities or an increase in highly liquid assets.
The cash ratio, which is the most conservative measure of liquidity, has shown variations over time. It remained relatively stable at around 1 in the past year, suggesting that Ultra Clean Holdings Inc has a sufficient level of cash and cash equivalents to cover its current liabilities.
Overall, the liquidity ratios suggest that Ultra Clean Holdings Inc has maintained a sound liquidity position, with the company being able to meet its short-term obligations and having a reasonable level of cash reserves. It is important to monitor these ratios over time to ensure continued financial stability.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 83.53 | 78.70 | 73.97 | 78.51 | 75.40 | 60.76 | 28.50 | 31.01 | 53.55 | 58.89 | 65.64 | 48.51 | 57.46 | 62.69 | 62.38 | 59.82 | 55.08 | 61.39 | 28.91 | 72.90 |
The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales. Ultra Clean Holdings Inc's cash conversion cycle has shown variability over the past few quarters, ranging from a low of 28.50 days to a high of 83.53 days.
The trend indicates that the company's efficiency in managing its working capital has fluctuated. Typically, a shorter cash conversion cycle is favorable as it indicates that the company is able to quickly turn its inventory and accounts receivable into cash.
The longer cash conversion cycles seen in certain quarters, such as 83.53 days in Dec 31, 2023, may suggest potential inefficiencies in managing inventory levels, credit terms with customers, or delays in collecting payments. Conversely, the shorter cycles observed in Jun 30, 2022 (28.50 days) and Mar 31, 2022 (31.01 days) reflect improved working capital management.
Overall, Ultra Clean Holdings Inc should aim to consistently optimize its cash conversion cycle to enhance cash flow efficiency and improve its liquidity position. Regular monitoring and analysis of this metric can help the company identify areas for improvement in its working capital management.