Arrow Electronics Inc (ARW)
Receivables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 27,923,300 | 33,107,100 | 37,124,400 | 34,477,000 | 28,673,400 |
| Receivables | US$ in thousands | 13,031,000 | 12,238,100 | 12,322,700 | 11,123,900 | 9,205,340 |
| Receivables turnover | 2.14 | 2.71 | 3.01 | 3.10 | 3.11 |
December 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $27,923,300K ÷ $13,031,000K
= 2.14
The receivables turnover ratio for Arrow Electronics Inc has experienced a slight decline over the past few years. In December 31, 2020, the ratio stood at 3.11, indicating that the company collected its outstanding receivables approximately 3.11 times during the year. Subsequently, there was a marginal decrease to 3.10 by the end of 2021. The trend continued with a further decrease to 3.01 by December 31, 2022, suggesting a longer collection period for receivables.
However, a more significant drop was observed by the end of 2023, with the ratio falling to 2.71, indicating a slower rate of receivables turnover compared to previous years. This trend continued into 2024, where the receivables turnover ratio decreased even further to 2.14, signaling potential challenges in collecting receivables efficiently.
Overall, the declining trend in the receivables turnover ratio for Arrow Electronics Inc raises concerns about the company's ability to collect outstanding receivables promptly. It may be necessary for the company to review its credit policies, collection processes, and customer relationships to improve the efficiency of receivables management and enhance cash flow.
Peer comparison
Dec 31, 2024