AAR Corp (AIR)
Receivables turnover
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,780,500 | 2,318,900 | 1,990,500 | 1,820,000 | 1,652,300 |
| Receivables | US$ in thousands | 495,100 | 410,400 | 328,200 | 287,600 | 238,600 |
| Receivables turnover | 5.62 | 5.65 | 6.06 | 6.33 | 6.92 |
May 31, 2025 calculation
Receivables turnover = Revenue ÷ Receivables
= $2,780,500K ÷ $495,100K
= 5.62
The receivables turnover ratio for AAR Corp has exhibited a declining trend over the period from May 31, 2021, to May 31, 2025. Specifically, the ratio decreased from 6.92 in 2021 to 6.33 in 2022, representing a reduction of approximately 8.4%. The decline continued into 2023, reaching 6.06, which is roughly a 4.4% decrease from 2022. Further reduction is observed in 2024, with a ratio of 5.65, indicating an approximate 6.7% decline from the previous year. The most recent data for May 31, 2025, shows a ratio of 5.62, a slight decrease of about 0.3% from 2024.
This overall downward trend in receivables turnover suggests that the company's efficiency in collecting accounts receivable has diminished over the analyzed period. A lower receivables turnover ratio implies longer average collection periods, which could indicate potential challenges in receivables management or changes in credit policies. Additionally, the gradual decline may reflect either a leniency in credit terms extended to customers or evolving customer payment behaviors, leading to increased days sales outstanding (DSO).
In summary, the steady decrease in the receivables turnover ratio over these years points towards a potential extension in collection cycles, warranting further assessment of credit and collections strategies to ensure optimal working capital management.
Peer comparison
May 31, 2025