{"url_path":"/sec/eltk/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-03-26","source_url":"https://www.sec.gov/Archives/edgar/data/1024672/0001178913-26-001768-index.html","accession_number":"0001178913-26-001768","cik":"0001024672","ticker":"ELTK","issuer_name":"ELTEK LTD","edgar_url":"https://www.sec.gov/Archives/edgar/data/1024672/0001178913-26-001768-index.html","primary_entity_key":"0001024672","primary_entity_name":"ELTEK LTD"},"word_count":489,"has_tables":true,"body_markdown":"ITEM 11.\n\nQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS\n\n \n\nWe are exposed to a variety of market risks,\nincluding foreign currency fluctuations and changes in interest rates affecting primarily the interest on short-term credit lines and\nlong-term loans.\n\n \n\nForeign Currency Exchange Risk\n\n \n\nOur reporting currency is the dollar. Our revenues are primarily\ndenominated in the dollar, NIS and Euros, while our expenses are primarily denominated in NIS, dollars and Euros. As a result, the NIS\nvalue of our dollar and Euro denominated revenues are negatively impacted by the depreciation of the dollar and the Euro against the NIS. \nIn addition, fluctuations in rates of exchange between NIS and other currencies may affect our operating results and financial condition.\nThe average exchange rate for the NIS against the dollar was approximately 6.7% lower in 2025 than 2024 and the average exchange rate\nof the NIS against the Euro was 2.7% lower in 2025 than 2024, and in total, these changes had a negative impact on our operating results\nin 2025. The average exchange rate for the NIS against the dollar was approximately 0.3% higher in 2024 than 2023 and the average exchange\nrate of the NIS against the Euro was 0.4% higher in 2024 than 2023, and in total, these changes had a positive impact on our operating\nresults in 2024. As of December 31, 2025, we estimate that a devaluation of 1% of the dollar against the NIS would result in a decrease\nof approximately $328,000 in our operating income and devaluation of 1% of the Euro against\nthe NIS would not have a material impact on our operating and financial results.\n\n \n\nIf we were to determine that it is in our best interests to enter\ninto hedging transactions in the future in order to protect ourselves in part from currency fluctuations, we may not be able to do so,\nor such transactions, if entered into, may not materially reduce the effect of fluctuations in foreign currency exchange rates on our\nresults of operations and may result in additional expenses.\n\n \n\nCommodity Price Risk\n\n \n\nCost of raw materials is a significant component of our cost of\nrevenues. In 2025, the cost of raw materials used in production was $13.1 million compared to $13.0 million in 2024. A 1% increase or\ndecrease in the cost of raw materials used in production would increase or decrease our cost of raw materials by approximately $131,000.   \n\n \n\nCredit Risk\n\n \n\nWe may be subject to significant concentrations of credit risk\nconsisting principally of cash and cash equivalents and trade accounts receivable.  Cash and cash equivalents are deposited with\nmajor financial institutions in Israel, Europe and the United States.\n\n \n\nThe risk of collection associated with trade receivables is reduced\nby the geographical dispersion of our customer base. However, our business involves selling products to customers for whose credit we\ndo not have insurance coverage, and we are exposed to risk with respect to our receivables from them."}