Edgewell Personal Care Co (EPC)

The receivables turnover ratio measures how efficiently a company is able to collect outstanding receivables from its customers. A higher receivables turnover ratio indicates that the company is collecting its receivables more frequently and efficiently.

Looking at the data provided for Edgewell Personal Care Co, we can observe a consistent increase in the receivables turnover ratio over the years. In Sep 30, 2019, the receivables turnover ratio was 8.41, which means the company turned over its receivables 8.41 times during that period. This ratio increased to 9.31 in Sep 30, 2020, then to 9.89 in Sep 30, 2021, and further to 11.03 in Sep 30, 2022. Finally, the ratio reached 18.00 in Sep 30, 2023, indicating a significant improvement in the efficiency of receivables collection.

The increasing trend in the receivables turnover ratio suggests that Edgewell Personal Care Co has been able to collect its outstanding receivables more rapidly in recent years. This could be a positive indicator of the company's credit policies, collection efforts, and the reliability of its customer base. It also implies that the company may be managing its credit risk effectively and maintaining strong relationships with its customers, leading to faster cash conversion.

Overall, the consistent improvement in the receivables turnover ratio demonstrates the company's effectiveness in managing its accounts receivable, which is an essential aspect of its working capital management. However, it is important to consider other factors such as industry benchmarks and specific business conditions when evaluating the efficiency of receivables management.

Peer comparison

Sep 30, 2023