Gilead Sciences Inc (GILD)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 26,229,000 | 26,413,000 | 26,325,000 | 24,689,000 | 22,449,000 |
| Receivables | US$ in thousands | 4,660,000 | 4,777,000 | 4,493,000 | 4,901,000 | 3,582,000 |
| Receivables turnover | 5.63 | 5.53 | 5.86 | 5.04 | 6.27 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $26,229,000K ÷ $4,660,000K
= 5.63
The receivables turnover ratio measures the efficiency of a company in collecting cash from its credit customers. Gilead Sciences, Inc. has shown relatively consistent performance in this aspect over the past five years, with the ratio ranging from 5.05 to 6.27.
In 2023, the company's receivables turnover ratio was 5.82, indicating that Gilead converted its accounts receivable into cash approximately 5.82 times during the year. This was slightly higher compared to the previous year's ratio of 5.71.
The increase in the receivables turnover ratio from 2022 to 2023 suggests that Gilead became more efficient in collecting payments from its customers within a shorter period. A higher turnover ratio is generally favorable as it signifies that the company is effectively managing its credit sales and collecting cash promptly.
Despite some fluctuations in the ratio over the years, Gilead's receivables turnover remains within a relatively stable range, reflecting a consistent approach to managing its accounts receivable. This indicates that the company has been successful in maintaining a balance between extending credit to customers and ensuring timely collection of payments, which is crucial for maintaining healthy cash flow and liquidity.
Peer comparison
Dec 31, 2023