SolarEdge Technologies Inc (SEDG)

Receivables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,976,530	3,110,280	1,963,860	1,459,270	1,425,660
Receivables	US$ in thousands	55,418	0	527,380	275,323	382,300
Receivables turnover		53.71	—	3.72	5.30	3.73

December 31, 2023 calculation

Receivables turnover = Revenue ÷ Receivables
= $2,976,530K ÷ $55,418K
= 53.71

The receivables turnover ratio measures how efficiently a company is able to collect payments from its customers. The higher the ratio, the quicker the company is able to convert its accounts receivable into cash.

Looking at Solaredge Technologies Inc's receivables turnover over the past five years, we can observe fluctuations in the efficiency of their accounts receivable management:

- In 2023, the receivables turnover ratio stood at 3.81, indicating that on average, the company collected its outstanding receivables approximately 3.81 times during the year. This represents an improvement compared to the previous year.

- In 2022, the ratio was 2.95, suggesting a slower collection pace compared to 2021. This could indicate potential issues with accounts receivable management or changes in customer payment behavior.

- In 2021, the ratio increased to 3.72, showing a better collection efficiency compared to 2020 when it was at 5.30.

- The significant drop in the receivables turnover ratio in 2020 to 5.30 could be concerning as it indicates a slower collection of outstanding payments, potentially leading to cash flow challenges if not addressed.

- Prior to 2020, the company maintained a relatively stable performance in terms of receivables turnover, with ratios around 3.73 in 2019.

Overall, Solaredge Technologies Inc's receivables turnover ratio has shown variability over the past five years, with improvements in recent years but with some fluctuations that may warrant further investigation into their accounts receivable management practices.