Healthcare Services Group Inc (HCSG)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,664,880 | 1,690,840 | 1,641,960 | 1,760,300 | 1,837,420 |
| Receivables | US$ in thousands | 383,509 | 343,406 | 302,201 | 255,474 | 340,930 |
| Receivables turnover | 4.34 | 4.92 | 5.43 | 6.89 | 5.39 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $1,664,880K ÷ $383,509K
= 4.34
Healthcare Services Group, Inc.'s receivables turnover ratio has been fluctuating over the past five years. The receivables turnover ratio indicates how efficiently the company is able to collect payments from its customers. A higher ratio suggests that the company is more effective in collecting payments, while a lower ratio may indicate issues with credit policies or collection efforts.
In 2023, the receivables turnover ratio decreased to 4.36 from 4.92 in 2022. This decline could imply that the company is taking longer to collect payments from customers, which may lead to cash flow challenges or increased credit risk. However, it's important to consider industry norms and seasonal variations that could impact this ratio.
Comparing to 2021 and 2020, where the receivables turnover ratios were 5.43 and 6.89, respectively, the recent decrease highlights a potential concern that warrants further investigation. It is essential for management to monitor and address any reasons behind the decrease in receivables turnover to ensure the company's financial health and sustainability moving forward.