ESCO Technologies Inc (ESE)
Receivables turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,011,550 | 947,264 | 852,649 | 715,135 | 728,985 |
| Receivables | US$ in thousands | 240,680 | 198,600 | 164,645 | 146,341 | 144,082 |
| Receivables turnover | 4.20 | 4.77 | 5.18 | 4.89 | 5.06 |
September 30, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $1,011,550K ÷ $240,680K
= 4.20
The receivables turnover ratio measures how efficiently a company is able to collect payments from its customers on credit sales. ESCO Technologies Inc's receivables turnover has shown a declining trend over the past five years, decreasing from 5.06 in 2020 to 4.20 in 2024.
A higher receivables turnover ratio is generally preferred as it indicates faster collection from customers. However, the decreasing trend for ESCO Technologies Inc raises concerns about their ability to efficiently collect receivables.
It is important for the company to analyze the reasons behind this trend, such as changes in credit policies, customer payment behavior, or the effectiveness of collection efforts. A declining receivables turnover ratio could potentially lead to liquidity issues if payments are delayed, impacting the company's cash flow and overall financial health. Management should closely monitor and address any factors contributing to this decrease to improve efficiency in receivables management.
Peer comparison
Sep 30, 2024