ITT Inc (ITT)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,283,000 | 2,987,700 | 2,765,000 | 2,477,800 | 2,846,400 |
| Receivables | US$ in thousands | 675,200 | 628,800 | 555,100 | 507,500 | 578,400 |
| Receivables turnover | 4.86 | 4.75 | 4.98 | 4.88 | 4.92 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $3,283,000K ÷ $675,200K
= 4.86
The receivables turnover ratio measures how efficiently a company is able to collect payments from its customers. It is calculated by dividing net credit sales by the average accounts receivable balance.
Analyzing ITT Inc's receivables turnover over the past five years, we observe a relatively stable trend ranging between 4.75 and 4.98. This indicates that on average, ITT Inc collects its accounts receivable approximately 4.86 times a year.
A higher receivables turnover ratio typically indicates that the company is collecting payments faster, which is generally seen as positive as it signifies efficient management of accounts receivable. On the other hand, a lower ratio may suggest difficulties in collecting payments promptly.
ITT Inc's consistent receivables turnover ratios over the past five years imply that the company has been effectively managing its accounts receivable in terms of collecting payments from customers. This stability indicates a persistent level of efficiency in the company's collections process, which can be a positive indicator of its overall financial health and operational effectiveness.
Peer comparison
Dec 31, 2023