MGP Ingredients Inc (MGPI)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 829,876 | 776,907 | 622,687 | 393,353 | 361,687 |
| Receivables | US$ in thousands | 145,476 | 113,594 | 98,076 | 56,966 | 41,918 |
| Receivables turnover | 5.70 | 6.84 | 6.35 | 6.91 | 8.63 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $829,876K ÷ $145,476K
= 5.70
The receivables turnover ratio for MGP Ingredients, Inc. has shown a decreasing trend over the past five years, indicating that the company has been taking longer to collect outstanding receivables from its customers.
In 2019, the receivables turnover ratio was at its highest at 8.65, suggesting that the company was able to convert its accounts receivable into cash nearly nine times within the year. However, this ratio decreased to 6.94 in 2020, further declining to 6.39 in 2021, and then to 6.89 in 2022.
The most recent data as of December 31, 2023, shows a receivables turnover ratio of 5.75. This downward trend could be a cause for concern as it may indicate potential issues with the company's credit policy, collection procedures, or the credit quality of its customers.
It is essential for MGP Ingredients, Inc. to monitor its receivables turnover closely and implement strategies to improve this ratio to ensure efficient cash flow management and timely collection of outstanding receivables.