Innospec Inc (IOSP)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,948,800 | 1,963,700 | 1,483,400 | 1,192,300 | 1,512,300 |
| Receivables | US$ in thousands | 359,800 | 334,600 | 284,500 | 221,400 | 292,000 |
| Receivables turnover | 5.42 | 5.87 | 5.21 | 5.39 | 5.18 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $1,948,800K ÷ $359,800K
= 5.42
The receivables turnover ratio for Innospec Inc has shown some fluctuations over the past five years. In 2023, the receivables turnover ratio stood at 5.42, a decrease from the previous year's ratio of 5.87. This indicates that, on average, the company collected its accounts receivable approximately 5.42 times during the year.
While the ratio decreased in 2023, it remained relatively consistent around the 5.2 to 5.9 range over the five-year period, with the exception of a slight increase in 2022. This consistency suggests that Innospec has been effective in managing its accounts receivable turnover, with a relatively stable performance in converting credit sales into cash within a given period.
A higher receivables turnover ratio typically implies that a company is more efficient in collecting outstanding receivables, which can be a positive indicator of liquidity and management effectiveness. However, a decreasing trend in the ratio may warrant further investigation into the company's credit policies, collection practices, or changes in the customer base that could impact its ability to collect receivables in a timely manner.
Overall, while the slight decrease in the receivables turnover ratio in 2023 may signal a potential area for further monitoring, the historical stability of the ratio within a moderate range suggests that Innospec Inc has generally maintained efficiency in managing its accounts receivable turnover in recent years.
Peer comparison
Dec 31, 2023