Hewlett Packard Enterprise Co (HPE)
Receivables turnover
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 30,127,000 | 29,135,000 | 28,496,000 | 27,784,000 | 26,982,000 |
| Receivables | US$ in thousands | 7,420,000 | 7,024,000 | 4,101,000 | 3,979,000 | 3,386,000 |
| Receivables turnover | 4.06 | 4.15 | 6.95 | 6.98 | 7.97 |
October 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $30,127,000K ÷ $7,420,000K
= 4.06
The receivables turnover ratio measures how efficiently a company is managing its accounts receivable by indicating how many times during a period the company collects its average accounts receivable balance.
Hewlett Packard Enterprise Co's receivables turnover has shown a decreasing trend over the past five years, declining from 7.97 in October 2020 to 4.06 in October 2024, which suggests that the company is taking longer to collect its accounts receivable compared to previous years.
A lower receivables turnover ratio may indicate that the company is either extending more lenient credit terms to customers or facing difficulties in collecting payments promptly. This can potentially lead to cash flow issues and increase the risk of bad debts for the company.
It is important for Hewlett Packard Enterprise Co to closely monitor its accounts receivable turnover and take proactive measures to improve collections efficiency, such as tightening credit policies, implementing stronger collection procedures, or reassessing customer creditworthiness. Regularly analyzing and addressing the factors affecting the receivables turnover ratio can help the company maintain healthy cash flows and mitigate the risks associated with extended credit terms.
Peer comparison
Oct 31, 2024