Generac Holdings Inc (GNRC)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,925,040 | 4,496,170 | 3,703,400 | 2,452,210 | 2,161,870 |
| Receivables | US$ in thousands | 537,316 | 522,458 | 546,466 | 374,906 | 319,538 |
| Receivables turnover | 7.30 | 8.61 | 6.78 | 6.54 | 6.77 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $3,925,040K ÷ $537,316K
= 7.30
The receivables turnover ratio measures how efficiently a company is collecting its accounts receivable during a particular period. A higher receivables turnover ratio indicates that the company is collecting its outstanding receivables more quickly.
Analyzing Generac Holdings Inc's receivables turnover ratio over the past five years, we observe fluctuations in the ratio as follows:
1. Dec 31, 2019: The receivables turnover ratio was 6.90, indicating that Generac converted its accounts receivable nearly 6.90 times during the year.
2. Dec 31, 2020: The ratio slightly decreased to 6.63, suggesting a slight dip in the company's ability to collect its receivables efficiently compared to the previous year.
3. Dec 31, 2021: The ratio rebounded to 6.84, showing some improvement in accounts receivable collection efficiency.
4. Dec 31, 2022: The ratio increased significantly to 8.74, indicating that Generac accelerated its collection of receivables, possibly by implementing more effective credit policies or improving collection processes.
5. Dec 31, 2023: The ratio decreased to 7.49, still higher than the ratios in the earlier years but slightly lower than the peak in 2022. This could suggest a potential slowdown in collection efficiency compared to the previous year.
Overall, Generac Holdings Inc has shown variations in its receivables turnover ratio over the past five years, with some years demonstrating improved efficiency in collecting accounts receivable and others showing slight declines. This metric is essential for assessing the company's liquidity and effectiveness in managing its receivables. It is crucial for stakeholders to monitor this ratio closely to ensure the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2023