Enerpac Tool Group Corp (EPAC)

The receivables turnover ratio measures how efficiently a company is collecting on its credit sales. It is calculated by dividing the total credit sales by the average accounts receivable balance. A higher receivables turnover ratio indicates that the company is collecting its outstanding receivables more frequently within a specific period.

Looking at the receivables turnover for Enerpac Tool Group Corp over the past five years, we can observe a fluctuating trend. In 2019, the receivables turnover ratio was 5.20, indicating that, on average, the company collected its receivables 5.20 times during the year. This number increased to 5.86 in 2020, suggesting a slight improvement in the efficiency of receivables collection.

In 2021, the ratio further increased to 5.12, indicating that the company's receivables were turning over slightly less frequently compared to the previous year. However, there was a substantial improvement in 2022, with the ratio reaching 5.35, signifying better collections efficiency.

The most recent data for 2023 shows a receivables turnover ratio of 6.13, the highest in the past five years. This suggests that Enerpac Tool Group Corp has significantly improved its collection process, indicating a more efficient management of its accounts receivable.

Overall, the increasing trend in the receivables turnover ratio over the past two years reflects more effective credit management and collection efforts by the company. This may indicate improved credit policies, more proactive collection procedures, or an overall increase in the quality of the company's customer base, all favorable signs for the financial health of Enerpac Tool Group Corp.

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Aug 31, 2023