Lincoln Electric Holdings Inc (LECO)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,174,950 | 3,761,210 | 3,234,180 | 2,655,400 | 3,003,270 |
| Receivables | US$ in thousands | 538,830 | 541,529 | 429,074 | 373,487 | 374,649 |
| Receivables turnover | 7.75 | 6.95 | 7.54 | 7.11 | 8.02 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $4,174,950K ÷ $538,830K
= 7.75
The receivables turnover for Lincoln Electric Holdings, Inc. has been relatively stable over the past five years, ranging from 6.95 to 8.02. This ratio indicates how efficiently the company is collecting on its credit sales from customers.
A higher receivables turnover ratio generally suggests that the company is efficiently managing its accounts receivable by collecting payments quickly. Conversely, a lower ratio may indicate potential issues with credit policies or slow collections from customers.
In this case, Lincoln Electric Holdings, Inc. has maintained a healthy receivables turnover ratio, hovering around 7 to 8 times annually. This implies that the company has been effectively managing its accounts receivable, converting them into cash multiple times throughout the year.
Overall, a consistent and relatively high receivables turnover ratio over the years reflects positively on the company's ability to collect payments from customers promptly, contributing to a healthy cash flow cycle.
Peer comparison
Dec 31, 2023