Synopsys Inc (SNPS)
Receivables turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,842,620 | 5,081,540 | 4,204,190 | 3,685,280 | 3,360,690 |
| Receivables | US$ in thousands | 1,006,980 | 842,345 | 604,090 | 831,641 | 592,070 |
| Receivables turnover | 5.80 | 6.03 | 6.96 | 4.43 | 5.68 |
October 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $5,842,620K ÷ $1,006,980K
= 5.80
The receivables turnover ratio measures how effectively a company is managing its receivables and collecting cash from its customers. It is calculated by dividing the net credit sales by the average accounts receivable balance. A higher turnover ratio indicates that the company is collecting its receivables more efficiently.
Synopsys, Inc.'s receivables turnover has fluctuated over the past five years. In 2023, the turnover ratio decreased to 6.17, down from 6.38 in 2022. This decline may indicate that the company took longer to collect its receivables in 2023 compared to the previous year. However, it is important to note that a higher turnover ratio does not always indicate better performance, as it could also result from lower credit sales.
When comparing the 2023 turnover ratio to earlier years, it is lower than the 7.40 achieved in 2021 but higher than the 4.72 in 2020. This suggests that Synopsys, Inc. experienced a more efficient collection of receivables in 2023 than in 2020, but it was less efficient compared to 2021.
Overall, Synopsys, Inc.'s decreasing receivables turnover ratio in 2023 may raise concerns about its ability to collect cash from customers efficiently. Further analysis of the company's credit sales, accounts receivable balance, and collection policies is necessary to fully assess the reasons behind the fluctuation in receivables turnover.
Peer comparison
Oct 31, 2023