Powell Industries Inc (POWL)
Receivables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,399,130 | 1,065,850 | 941,620 | 1,037,320 | 1,034,130 |
| Receivables | US$ in thousands | 206,691 | 106,216 | 78,465 | 70,424 | 112,326 |
| Receivables turnover | 6.77 | 10.03 | 12.00 | 14.73 | 9.21 |
September 30, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $1,399,130K ÷ $206,691K
= 6.77
The receivables turnover ratio measures how effectively a company is managing its receivables. A higher turnover ratio indicates that the company is collecting its receivables more efficiently.
Looking at Powell Industries' receivables turnover over the past five years, there appears to be a declining trend. In 2019, the turnover ratio was 4.60, indicating that the company collected its receivables approximately 4.60 times during the year. However, this ratio has been decreasing annually, reaching 3.38 in 2023.
A decreasing receivables turnover ratio may suggest that Powell Industries is taking longer to collect its receivables, which could potentially indicate issues with credit and collection policies, or difficulties with customer payments. It would be prudent for the company to analyze the reasons behind the declining turnover ratio and take appropriate measures to improve the collection process and manage its receivables more efficiently in the future.
It's important to note that receivables turnover should be analyzed in conjunction with other financial metrics to gain a comprehensive understanding of the company's financial performance and management of its receivables.
Peer comparison
Sep 30, 2023