Otter Tail Corporation (OTTR)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,353,480	1,469,480	1,197,640	883,171	919,503
Receivables	US$ in thousands	159,665	146,041	176,789	117,174	111,379
Receivables turnover		8.48	10.06	6.77	7.54	8.26

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $1,353,480K ÷ $159,665K
= 8.48

The receivables turnover ratio for Otter Tail Corporation has shown some fluctuations over the past five years. In 2023, the company's receivables turnover ratio was 8.59, which indicates that on average, the company collected its accounts receivable approximately 8.59 times during the year. This represents a decrease from the previous year's ratio of 10.11.

The declining trend in receivables turnover could suggest that Otter Tail Corporation is taking longer to collect payments from its customers, which may raise concerns about the company's liquidity and efficiency in managing its receivables. However, it is essential to consider industry norms and the company's specific circumstances before drawing definitive conclusions.

Overall, a consistently high receivables turnover ratio is generally preferred, as it signifies that a company is efficiently managing its accounts receivable and converting sales into cash quickly. In contrast, a declining or low ratio could indicate potential issues with credit policies, customer payment delays, or ineffective collection procedures that need to be addressed for improved financial performance.