HP Inc (HPQ)
Receivables turnover
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 53,559,000 | 53,718,000 | 62,910,000 | 63,460,000 | 56,639,000 |
| Receivables | US$ in thousands | 7,297,000 | 5,586,000 | 1,270,000 | 7,844,000 | 7,473,000 |
| Receivables turnover | 7.34 | 9.62 | 49.54 | 8.09 | 7.58 |
October 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $53,559,000K ÷ $7,297,000K
= 7.34
The receivables turnover for HP Inc has fluctuated over the past five years, ranging from a low of 7.58 in 2020 to a high of 49.54 in 2022. This ratio indicates the efficiency with which HP Inc is collecting payments from its customers over a given period. A higher receivables turnover ratio is generally preferred as it signifies that the company is converting its accounts receivable into cash more quickly.
In 2022, the exceptionally high receivables turnover of 49.54 suggests that HP Inc was very effective in collecting payments from its customers during that year. This could indicate strong credit control measures or prompt payment collection processes in place.
However, it is important to note that the receivables turnover dropped significantly in 2023 to 9.62, which may raise some concerns about the efficiency of HP Inc's accounts receivable management during that period. The company managed to improve this ratio slightly in 2024 to 7.34, but it still remains lower than the levels seen in 2022 and 2021.
Overall, HP Inc should continue to monitor and potentially improve its receivables turnover ratio to ensure efficient management of its accounts receivable and timely collection of payments from customers.
Peer comparison
Oct 31, 2024