FMC Corporation (FMC)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,174,400 | 5,573,700 | 5,034,800 | 4,636,800 | 4,609,800 |
| Receivables | US$ in thousands | 2,703,200 | 2,871,400 | 2,583,700 | 2,330,300 | 2,231,200 |
| Receivables turnover | 1.54 | 1.94 | 1.95 | 1.99 | 2.07 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $4,174,400K ÷ $2,703,200K
= 1.54
The receivables turnover ratio for FMC Corp. has been consistently declining over the past five years, starting at 2.07 in 2019 and dropping to 1.66 in 2023. This indicates a decreasing efficiency in collecting receivables during this period.
A lower receivables turnover ratio suggests that the company is taking longer to collect payments from its customers, potentially leading to cash flow constraints and liquidity issues. It could also point towards potential credit risks if customers are delaying payments.
It is essential for FMC Corp. to investigate the reasons behind this decreasing trend and take necessary steps to improve its receivables turnover ratio, such as implementing stricter credit policies, improving collection processes, or reassessing customer creditworthiness to ensure timely cash inflows and maintain financial stability.
Peer comparison
Dec 31, 2023