Garmin Ltd (GRMN)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	5,254,470	4,851,100	4,937,230	4,191,200	3,740,940
Receivables	US$ in thousands	815,243	656,847	843,445	849,469	706,763
Receivables turnover		6.45	7.39	5.85	4.93	5.29

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $5,254,470K ÷ $815,243K
= 6.45

The receivables turnover ratio of Garmin Ltd has shown variability over the past five years. In 2023, the company recorded a receivables turnover ratio of 6.45, indicating that it collects its accounts receivable approximately 6.45 times during the year. This represents a decrease from the previous year's ratio of 7.39 in 2022.

The downward trend in 2023 could suggest that Garmin Ltd took longer to collect its receivables compared to the prior year, which may lead to potential concerns about the company's liquidity and efficiency in managing its receivables.

Additionally, when compared to the ratios from 2021 (5.85), 2020 (4.93), and 2019 (5.29), the 2023 ratio appears relatively stronger, indicating an improvement in receivables management efficiency over the long term.

It is essential for Garmin Ltd to analyze the reasons behind the fluctuation in the receivables turnover ratio and take appropriate steps to ensure effective collections management and maintain optimal liquidity levels. A lower ratio could potentially indicate issues with credit policies, collection procedures, or customer creditworthiness, which should be addressed to enhance the company's overall financial stability.