Smith AO Corporation (AOS)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,840,800 | 3,744,500 | 3,534,600 | 2,888,000 | 2,981,700 |
| Receivables | US$ in thousands | 596,000 | 581,200 | 634,400 | 585,000 | 589,500 |
| Receivables turnover | 6.44 | 6.44 | 5.57 | 4.94 | 5.06 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $3,840,800K ÷ $596,000K
= 6.44
The receivables turnover ratio measures how efficiently A.O. Smith Corp. is collecting payments from its customers. A higher turnover ratio indicates that the company is collecting receivables more quickly.
From 2019 to 2023, A.O. Smith Corp.'s receivables turnover has fluctuated, ranging from 4.95 to 6.46. The increase in the ratio from 2019 to 2020 showed improved efficiency in collecting payments from customers. This trend continued in 2021, with the ratio peaking at 6.46, indicating that the company was collecting receivables at a faster rate.
However, in 2022, the receivables turnover ratio remained the same as in the previous year, suggesting a potential plateau in collection efficiency. The ratio's stability may indicate that the company has optimized its collection processes.
Overall, A.O. Smith Corp. has shown a generally stable and efficient performance in collecting receivables over the past five years, with some fluctuations in efficiency levels. It is important for the company to monitor this ratio closely to ensure timely collections and maintain healthy cash flows.
Peer comparison
Dec 31, 2023