Compass Minerals International Inc (CMP)

Receivables turnover

		Sep 30, 2023	Sep 30, 2022	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Revenue	US$ in thousands	1,155,100	1,200,100	946,700	1,408,800	1,436,900
Receivables	US$ in thousands	129,500	167,200	185,100	342,400	311,600
Receivables turnover		8.92	7.18	5.11	4.11	4.61

September 30, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $1,155,100K ÷ $129,500K
= 8.92

The receivables turnover ratio measures how efficiently a company is able to collect payments from its customers. A higher ratio indicates a more efficient collection process.

In the case of Compass Minerals International Inc, the receivables turnover has shown a consistent upward trend over the past five years. In September 2023, the receivables turnover stood at 9.30 times, indicating a significant improvement from 7.44 times in September 2022.

This suggests that Compass Minerals International Inc has been able to collect receivables more quickly relative to its sales, which can be a positive sign of effective credit and collection policies. It may also indicate better management of customer credit and a reduction in the average collection period.

The steady increase in the receivables turnover ratio over the years reflects positively on the company's ability to efficiently manage its accounts receivable, potentially leading to improved cash flow and liquidity. However, it is essential to further analyze the company's industry benchmark and compare this ratio with its peers to gain a comprehensive understanding of its receivables management.