Akamai Technologies Inc (AKAM)

Receivables turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	4,016,072	3,984,572	3,940,389	3,893,373	3,826,238	3,733,857	3,652,471	3,620,307	3,608,242	3,585,821	3,548,899	3,483,286	3,407,208	3,348,137	3,281,469	3,224,148	3,146,371	3,072,207	2,995,310	2,915,391
Receivables	US$ in thousands	727,687	696,493	699,258	716,638	724,302	713,382	698,445	705,817	679,206	622,027	668,425	718,793	675,926	660,092	656,609	666,536	660,052	630,406	644,659	613,809
Receivables turnover		5.52	5.72	5.64	5.43	5.28	5.23	5.23	5.13	5.31	5.76	5.31	4.85	5.04	5.07	5.00	4.84	4.77	4.87	4.65	4.75

December 31, 2024 calculation

Receivables turnover = Revenue (ttm) ÷ Receivables
= $4,016,072K ÷ $727,687K
= 5.52

The receivables turnover ratio for Akamai Technologies Inc has been relatively stable over the past few years, ranging between 4.65 and 5.76. This ratio measures how efficiently the company is able to collect payments from its customers. A higher turnover ratio indicates that the company is able to collect its accounts receivable more frequently within a given period, which can be a positive sign of effective credit management and timely collection efforts.

Akamai's receivables turnover ratio has shown an overall increasing trend, with some fluctuations, from 4.65 in June 2020 to 5.72 in September 2024. This improvement suggests that the company has been able to enhance its collections process and reduce the average time taken to receive payments from customers. This can help improve cash flow and working capital management, as well as reduce the risk of bad debts.

However, it is important to note that a very high receivables turnover ratio could also indicate overly stringent credit policies that may discourage potential customers. Therefore, while a higher ratio is generally preferred, it should be evaluated in conjunction with other financial metrics and industry benchmarks to ensure a balanced approach towards credit management and customer relationships.