Smith AO Corporation (AOS)
Receivables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,818,100 | 3,840,800 | 3,744,500 | 3,534,600 | 2,888,000 |
| Receivables | US$ in thousands | 541,400 | 596,000 | 581,200 | 634,400 | 585,000 |
| Receivables turnover | 7.05 | 6.44 | 6.44 | 5.57 | 4.94 |
December 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $3,818,100K ÷ $541,400K
= 7.05
Based on the data provided, Smith AO Corporation's receivables turnover has shown a generally increasing trend over the years. The receivables turnover ratio measures how efficiently a company is able to collect its outstanding receivables during a specific period.
In 2020, the receivables turnover ratio was 4.94, indicating that, on average, the company collected its outstanding receivables nearly 5 times during that year. Over the subsequent years, there was a noticeable improvement in the ratio, with the figure reaching 7.05 by December 31, 2024.
The increasing trend in the receivables turnover ratio suggests that Smith AO Corporation has been able to enhance its collection efficiency over the years. This improvement may be attributed to more effective credit control, streamlined invoicing and collection processes, or potential changes in customer payment behavior.
A higher receivables turnover ratio typically signifies a shorter average collection period, which can lead to improved cash flow, reduced bad debt risks, and better liquidity for the company. Overall, the upward trend in Smith AO Corporation's receivables turnover ratio reflects positively on its management of accounts receivable.
Peer comparison
Dec 31, 2024