Amgen Inc (AMGN)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 25,568,000 | 51,272,000 | 50,799,000 | 25,424,000 | 23,362,000 |
| Receivables | US$ in thousands | 7,942,000 | 6,392,000 | 5,839,000 | 5,324,000 | 4,652,000 |
| Receivables turnover | 3.22 | 8.02 | 8.70 | 4.78 | 5.02 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $25,568,000K ÷ $7,942,000K
= 3.22
The receivables turnover ratio for AMGEN Inc. has shown a decreasing trend over the past five years. In 2019, the ratio stood at 5.76, indicating that the company turned over its accounts receivable approximately 5.76 times during the year. However, by the end of 2023, the ratio had decreased to 3.79, suggesting that the company's ability to collect payments from customers had weakened.
A declining receivables turnover ratio may be a cause for concern as it could indicate issues with the company's credit policies, collection procedures, or the creditworthiness of its customers. A lower ratio implies that it takes the company longer to collect outstanding receivables, which could potentially impact its cash flow and liquidity.
It is advisable for AMGEN Inc. to further investigate the reasons behind the decreasing receivables turnover ratio and implement strategies to improve it. This could involve tightening credit terms, monitoring and managing receivables more efficiently, or conducting a review of customer creditworthiness to reduce the risk of bad debts. Ultimately, a higher receivables turnover ratio signifies a more efficient management of accounts receivable, highlighting the importance of timely collections in maintaining healthy cash flow.
Peer comparison
Dec 31, 2023