McCormick & Company Incorporated (MKC)
Receivables turnover
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,662,200 | 6,350,500 | 6,317,900 | 5,601,300 | 5,347,400 |
| Receivables | US$ in thousands | 587,500 | 573,700 | 549,500 | 528,500 | 502,900 |
| Receivables turnover | 11.34 | 11.07 | 11.50 | 10.60 | 10.63 |
November 30, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $6,662,200K ÷ $587,500K
= 11.34
The receivables turnover ratio measures the efficiency with which a company is able to collect its accounts receivable. A higher receivables turnover ratio indicates a shorter time to collect outstanding receivables, which is generally favorable.
Looking at the historical data for McCormick & Co., Inc., we can observe a steady trend in the receivables turnover ratio over the past five years. The ratio has been consistently above 10, indicating that the company has been effective in collecting receivables in a timely manner.
In particular, the receivables turnover ratio increased from 10.63 in 2019 to 11.50 in 2021 before slightly decreasing to 11.07 in 2022 and then increasing again to 11.34 in 2023. This trend suggests that McCormick & Co., Inc. has demonstrated a consistent ability to efficiently collect its accounts receivable over the years.
Overall, the company's receivables turnover ratio indicates that it has been successful in managing its receivables and converting them into cash, which is a positive reflection of its operational efficiency and liquidity management.