EMCOR Group Inc (EME)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,582,900 | 11,076,100 | 9,903,580 | 8,797,060 | 9,174,610 |
| Receivables | US$ in thousands | 3,203,490 | 2,567,400 | 2,204,520 | 1,922,100 | 2,030,800 |
| Receivables turnover | 3.93 | 4.31 | 4.49 | 4.58 | 4.52 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $12,582,900K ÷ $3,203,490K
= 3.93
The receivables turnover ratio measures how efficiently a company is managing its accounts receivable by indicating how many times during a period the company collects its average receivables balance. A higher receivables turnover ratio generally suggests that the company is collecting outstanding payments more quickly.
Analyzing Emcor Group, Inc.'s trend in receivables turnover over the past five years, we observe a gradual decline in the ratio from 4.52 in 2019 to 3.93 in 2023. This decline indicates that Emcor Group, Inc. is taking longer to collect its accounts receivable over the years.
A lower receivables turnover ratio may suggest less efficient management of accounts receivable or potential issues with credit policies, collection efforts, or customer payment trends. Companies with consistently declining receivables turnover ratios may face liquidity challenges if they are unable to convert outstanding receivables into cash promptly.
It is advisable for Emcor Group, Inc. to further investigate the reasons behind the decreasing trend in receivables turnover and take appropriate actions to improve efficiency in the collection of accounts receivable. This may involve reassessing credit terms, enhancing collection procedures, or addressing any underlying issues impacting timely payments from customers.
Peer comparison
Dec 31, 2023