Ingersoll Rand Inc (IR)

Receivables turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Revenue (ttm) US$ in thousands 7,235,000 7,157,800 7,035,700 6,916,900 6,876,100 6,678,400 6,455,200 6,208,600 5,916,300 5,711,400 5,520,700 5,359,900 5,152,400 4,952,100 4,739,600 4,485,900 4,059,900 3,012,800 2,497,000 2,100,700
Receivables US$ in thousands 1,335,400 1,342,200 1,301,400 1,245,200 1,234,200 1,216,100 1,219,800 1,243,600 1,122,000 1,032,300 1,018,500 1,013,900 948,600 927,000 935,800 978,100 966,600 934,600 922,200 1,027,500
Receivables turnover 5.42 5.33 5.41 5.55 5.57 5.49 5.29 4.99 5.27 5.53 5.42 5.29 5.43 5.34 5.06 4.59 4.20 3.22 2.71 2.04

December 31, 2024 calculation

Receivables turnover = Revenue (ttm) ÷ Receivables
= $7,235,000K ÷ $1,335,400K
= 5.42

Ingersoll Rand Inc's receivables turnover has shown an increasing trend over the past few years, indicating an improvement in the company's ability to collect outstanding receivables efficiently. The ratio has increased steadily from 2.04 in March 2020 to 5.42 in June 2024. This suggests that the company is turning over its accounts receivable balance more frequently, which is a positive sign as it reflects a shorter average collection period.

A higher receivables turnover ratio generally indicates that the company is effectively managing its credit sales and collection processes. It also implies that the company is converting its credit sales into cash more quickly, which can improve liquidity and working capital management.

However, it is essential to note that an excessively high receivables turnover ratio may also indicate a very strict credit policy that could potentially impact sales volume. Therefore, a balance must be maintained to ensure efficient collections without compromising on sales growth.

Overall, the increasing trend in Ingersoll Rand Inc's receivables turnover ratio signifies an improvement in the company's efficiency in managing its accounts receivable, which is a positive indicator of its financial health and operational performance.