ITT Inc (ITT)
Receivables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,630,700 | 3,283,000 | 2,987,700 | 2,765,000 | 2,477,800 |
| Receivables | US$ in thousands | 703,000 | 675,200 | 628,800 | 555,100 | 507,500 |
| Receivables turnover | 5.16 | 4.86 | 4.75 | 4.98 | 4.88 |
December 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $3,630,700K ÷ $703,000K
= 5.16
The receivables turnover ratio for ITT Inc has shown a generally positive trend over the five-year period from December 31, 2020, to December 31, 2024. The ratio has increased from 4.88 in 2020 to 5.16 in 2024, indicating that the company is collecting its accounts receivables more efficiently.
A higher receivables turnover ratio suggests that ITT Inc is able to collect outstanding customer payments more quickly, which is a positive sign of effective credit management and liquidity. This improvement may be attributed to better credit policies, more stringent collection efforts, or a shift towards customers with stronger payment histories.
However, it is important for ITT Inc to monitor this ratio regularly, as a very high turnover ratio could potentially indicate overly strict credit policies that could hinder sales growth. Conversely, a decreasing ratio may suggest potential issues with collecting outstanding receivables on time, which could impact the company's cash flow and overall financial health.
Overall, the increasing trend in ITT Inc's receivables turnover ratio reflects positively on the company's ability to efficiently manage its accounts receivables and convert them into cash, a key aspect of maintaining financial stability and operational effectiveness.
Peer comparison
Dec 31, 2024