Simulations Plus Inc (SLP)
Receivables turnover
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 59,577 | 53,906 | 46,466 | 41,589 | 33,970 |
| Receivables | US$ in thousands | 10,201 | 13,787 | 9,851 | 7,422 | 5,027 |
| Receivables turnover | 5.84 | 3.91 | 4.72 | 5.60 | 6.76 |
August 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $59,577K ÷ $10,201K
= 5.84
The receivables turnover ratio measures the efficiency of a company in collecting its accounts receivable. A higher ratio indicates a faster collection of receivables, which is generally favorable.
Looking at the trend of Simulations Plus Inc.'s receivables turnover from 2019 to 2023, there is a notable fluctuation. In 2019, the receivables turnover ratio was 6.76, indicating that the company collected its receivables approximately 6.76 times during that year. Subsequently, the ratio decreased to 5.60 in 2020, then increased to 4.72 in 2021, and further increased to 3.91 in 2022. The most recent data for 2023 shows an improvement, with the receivables turnover ratio rising to 5.84.
The upward trend in the most recent year is a positive sign, suggesting that the company has improved its efficiency in collecting receivables. However, it's important to note that the ratio has not yet reached the 2019 level, indicating that the company's collection of receivables has not fully recovered to the previous optimal level.
In conclusion, while the recent increase in the receivables turnover ratio for Simulations Plus Inc. is a positive development, management should continue to monitor and work towards achieving and maintaining a higher turnover ratio to ensure efficient management of accounts receivable.
Peer comparison
Aug 31, 2023