Emerson Electric Company (EMR)
Receivables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 15,115,000 | 19,622,000 | 18,267,000 | 16,785,000 | 18,372,000 |
| Receivables | US$ in thousands | 3,077,000 | 3,436,000 | 2,971,000 | 2,802,000 | 2,985,000 |
| Receivables turnover | 4.91 | 5.71 | 6.15 | 5.99 | 6.15 |
September 30, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $15,115,000K ÷ $3,077,000K
= 4.91
The receivables turnover ratio for Emerson Electric Co. has fluctuated over the past five years, ranging from 5.99 to 6.53. This ratio indicates how efficiently the company is able to collect on its credit sales. A higher turnover ratio suggests that the company is collecting its receivables more frequently during the year.
In this case, the company's receivables turnover has been consistently above 6, which indicates that Emerson Electric Co. is effectively converting its credit sales into cash. The relatively stable and high turnover ratio over the years reflects strong credit management and efficient collection procedures.
However, it's important to note that a declining trend in the receivables turnover could signify potential issues with collecting outstanding receivables or an increase in credit sales relative to the ability to collect on them. Therefore, while the current ratio suggests efficient collection practices, it is crucial for the company to monitor any potential shifts in this trend to ensure continued effectiveness in managing its accounts receivable.
Peer comparison
Sep 30, 2023