Middlesex Water Company (MSEX)

Receivables turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	153,588	156,997	159,166	157,131	161,158	154,740	147,137	144,256	135,282	135,917	135,959	134,658	133,956	131,761	129,520	127,795	127,194	128,174	129,392	130,640
Receivables	US$ in thousands	27,469	30,306	26,297	24,186	24,677	29,103	24,918	21,628	22,584	26,102	22,097	19,919	21,634	24,390	21,558	17,525	19,091	22,824	20,001	16,922
Receivables turnover		5.59	5.18	6.05	6.50	6.53	5.32	5.90	6.67	5.99	5.21	6.15	6.76	6.19	5.40	6.01	7.29	6.66	5.62	6.47	7.72

December 31, 2023 calculation

Receivables turnover = Revenue (ttm) ÷ Receivables
= $153,588K ÷ $27,469K
= 5.59

The receivables turnover ratio measures how efficiently a company is collecting cash from its credit sales customers. Middlesex Water Co.'s receivables turnover has varied over the past eight quarters, ranging from a low of 1.35 in Q3 2023 to a high of 6.80 in Q1 2023.

The significant fluctuation in the receivables turnover ratio indicates inconsistency in the company's ability to collect receivables promptly. A lower ratio suggests longer collection periods, potentially signaling issues with credit policies, customer payment behaviors, or ineffective collection procedures. In contrast, a higher ratio indicates efficient collection practices and effective credit management.

The average receivables turnover over the eight quarters is 5.70, indicating that Middlesex Water Co. generally collects its receivables approximately 5.70 times a year. A consistently high turnover ratio is generally preferred, as it reflects a quicker conversion of receivables into cash, which can improve liquidity and cash flow management.

Management should analyze the reasons behind the fluctuations in receivables turnover and take appropriate actions to streamline and improve the collection process for better financial health and operational efficiency.