Howmet Aerospace Inc (HWM)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,422,000 | 5,433,000 | 4,565,000 | 4,881,000 | 13,875,000 |
| Receivables | US$ in thousands | 692,000 | 537,000 | 420,000 | 598,000 | 1,451,000 |
| Receivables turnover | 9.28 | 10.12 | 10.87 | 8.16 | 9.56 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $6,422,000K ÷ $692,000K
= 9.28
The receivables turnover ratio measures the efficiency of Howmet Aerospace Inc in collecting outstanding receivables from its customers. A higher receivables turnover ratio indicates that the company is more effective in managing its accounts receivable.
Looking at the trend over the past five years, we observe fluctuations in the receivables turnover ratio for Howmet Aerospace Inc. In 2019, the ratio was 9.78, which increased to 14.73 in 2020, reflecting a significant improvement in the company's ability to collect receivables efficiently. However, in the following years, the ratio decreased to 11.84 in 2021, further declining to 10.55 in 2022, and finally reaching 9.60 in 2023.
The declining trend in the receivables turnover ratio may indicate potential issues with the company's credit policies, collection processes, or the quality of its customer base. A lower ratio could imply that Howmet Aerospace Inc is taking longer to convert its receivables into cash, which may lead to liquidity challenges or increased credit risk.
Overall, it is essential for Howmet Aerospace Inc to closely monitor its receivables turnover ratio and implement strategies to improve efficiency in collecting accounts receivable to maintain healthy cash flows and financial stability.
Peer comparison
Dec 31, 2023