Cognizant Technology Solutions Corp Class A (CTSH)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 19,353,000 | 19,428,000 | 18,507,000 | 16,652,000 | 16,783,000 |
| Receivables | US$ in thousands | 3,849,000 | 3,796,000 | 3,557,000 | 3,087,000 | 3,256,000 |
| Receivables turnover | 5.03 | 5.12 | 5.20 | 5.39 | 5.15 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $19,353,000K ÷ $3,849,000K
= 5.03
The receivables turnover ratio for Cognizant Technology Solutions Corp. has shown a relatively consistent trend over the past five years, ranging between 5.03 and 5.39. This ratio measures how efficiently the company is able to collect cash from its credit sales during a specific period.
A higher receivables turnover ratio indicates that the company is collecting its accounts receivable more quickly, which is generally favorable as it signifies a shorter average collection period. It suggests that the company has efficient credit and collection policies in place.
On the other hand, a lower ratio may indicate that the company is struggling to collect its receivables promptly, potentially facing issues such as customers delaying their payments or credit policies that are too lenient.
Overall, the relatively stable receivables turnover ratio for Cognizant Technology Solutions Corp. suggests that the company has been managing its accounts receivable effectively over the years, maintaining a balance between extending credit to customers and collecting cash efficiently.
Peer comparison
Dec 31, 2023