American Water Works (AWK)

Receivables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	4,653,000	4,217,000	3,782,000	4,677,000	3,777,000
Receivables	US$ in thousands	756,000	727,000	723,000	519,000	527,000
Receivables turnover		6.15	5.80	5.23	9.01	7.17

December 31, 2024 calculation

Receivables turnover = Revenue ÷ Receivables
= $4,653,000K ÷ $756,000K
= 6.15

Based on the data provided, American Water Works' receivables turnover ratio has fluctuated over the past five years. The receivables turnover ratio indicates how efficiently the company is collecting outstanding receivables from its customers.

In December 31, 2020, the receivables turnover ratio was 7.17, which means that on average, the company collected its outstanding receivables approximately 7.17 times during that year. This indicates a decent level of efficiency in collecting receivables.

The ratio improved in December 31, 2021, to 9.01, suggesting that the company became more efficient in collecting its receivables during that year.

However, in December 31, 2022, the ratio decreased significantly to 5.23, indicating that the company took longer to collect its receivables compared to the previous year. This may be a concerning trend as a lower receivables turnover ratio could suggest potential issues with collecting payments from customers.

Subsequently, in December 31, 2023, the ratio improved slightly to 5.80, showing a modest recovery in the company's receivables turnover efficiency.

Finally, in December 31, 2024, the ratio increased to 6.15, suggesting a further improvement in the efficiency of collecting outstanding receivables.

Overall, American Water Works' receivables turnover ratio has shown some fluctuation over the past five years, with a noticeable dip in 2022 followed by some recovery in the subsequent years. The company may need to closely monitor its receivables management processes to ensure timely collection of outstanding payments from customers.