Hormel Foods Corporation (HRL)
Receivables turnover
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,036,600 | 12,389,600 | 11,339,200 | 9,585,600 | 9,496,530 |
| Receivables | US$ in thousands | 824,633 | 874,770 | 904,012 | 743,868 | 594,320 |
| Receivables turnover | 14.60 | 14.16 | 12.54 | 12.89 | 15.98 |
October 29, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $12,036,600K ÷ $824,633K
= 14.60
The receivables turnover ratio measures how efficiently a company collects cash from its customers. It is calculated by dividing net credit sales by average accounts receivable.
Looking at the receivables turnover for Hormel Foods Corp. over the past five years, we can see an increasing trend from 2019 to 2020, followed by a decrease in 2021 and an increase again in 2022 and 2023.
The higher turnover ratio indicates that the company is collecting its outstanding receivables more frequently, which is favorable as it implies better liquidity and cash flow. However, the fluctuation in the ratio over the years could indicate changes in the company's credit policy, industry conditions, or customer payment behavior.
It's important to further analyze the components of the receivables turnover ratio and compare it with industry benchmarks to gain deeper insights into the company's receivables management efficiency.