Caterpillar Inc (CAT)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 67,060,000 | 59,427,000 | 50,971,000 | 41,748,000 | 53,800,000 |
| Receivables | US$ in thousands | 18,820,000 | 17,869,000 | 17,375,000 | 16,780,000 | 7,648,000 |
| Receivables turnover | 3.56 | 3.33 | 2.93 | 2.49 | 7.03 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $67,060,000K ÷ $18,820,000K
= 3.56
The receivables turnover ratio for Caterpillar Inc. has been steadily increasing over the past five years, indicating an improvement in the efficiency of the company in collecting its accounts receivables. This suggests that Caterpillar is managing its credit sales and collections more effectively, converting its accounts receivables into cash at a faster rate.
A higher receivables turnover ratio implies a shorter average collection period, which is generally a positive sign as it indicates that customers are paying their bills more promptly. It also suggests that the company's credit policies are effective in attracting customers who pay quickly.
Caterpillar's receivables turnover ratio of 7.20 in 2023 represents a notable improvement from the ratio of 6.28 in 2019. This trend indicates that the company has been successful in optimizing its receivables management processes over the years, which is a key element in maintaining healthy liquidity and cash flow within the organization.
Peer comparison
Dec 31, 2023