Trex Company Inc (TREX)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,091,690 | 1,090,750 | 1,197,010 | 881,886 | 746,565 |
| Receivables | US$ in thousands | 50,747 | 122,036 | 151,502 | 114,571 | 81,137 |
| Receivables turnover | 21.51 | 8.94 | 7.90 | 7.70 | 9.20 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $1,091,690K ÷ $50,747K
= 21.51
The trend analysis of TREX Co., Inc.'s receivables turnover ratio over the past five years indicates a significant improvement in the management of the company's accounts receivable. The receivables turnover ratio has been increasing steadily from 9.19 in 2019 to 21.57 in 2023.
This indicates that TREX Co., Inc. is collecting its accounts receivable more efficiently, with a higher turnover of receivables per year. A higher receivables turnover ratio suggests that the company is effectively converting its credit sales into cash, which is a positive sign of improved liquidity and working capital management.
The substantial increase in the receivables turnover ratio from 2019 to 2023 reflects the company's efforts in enhancing its credit collection processes or possibly a shift in sales strategy towards more cash sales.
Overall, the upward trend in receivables turnover ratio signifies an improvement in TREX Co., Inc.'s ability to efficiently manage and collect its accounts receivable, which is a positive indicator of its financial health and operational efficiency.
Peer comparison
Dec 31, 2023