Tyson Foods Inc (TSN)
Receivables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 52,881,000 | 53,282,000 | 47,049,000 | 43,185,000 | 42,405,000 |
| Receivables | US$ in thousands | 2,476,000 | 2,577,000 | 2,400,000 | 1,952,000 | 2,173,000 |
| Receivables turnover | 21.36 | 20.68 | 19.60 | 22.12 | 19.51 |
September 30, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $52,881,000K ÷ $2,476,000K
= 21.36
The receivables turnover ratio measures how efficiently a company is collecting its accounts receivable. A higher ratio indicates faster collection of receivables, which is generally favorable as it reflects a shorter time between the company's credit sales and receipt of cash.
Looking at Tyson Foods, Inc.'s receivables turnover ratio over the past five years, we observe a generally increasing trend. In 2019, the ratio stood at 19.51 and has since shown a noticeable upward trajectory, reaching 21.36 in 2023. This improvement suggests that Tyson Foods has been managing its accounts receivable more effectively over the years.
A high receivables turnover ratio may indicate several positive aspects of the company's operations, such as effective credit and collection policies, a strong customer base, and efficient sales processes. It also suggests that Tyson Foods has been successful in ensuring timely payments from its customers, reflecting positively on its liquidity and cash flow.
However, it is important to note that receivables turnover ratio should be analyzed in conjunction with the company's industry norms and compared to its competitors for a more comprehensive assessment. Additionally, a very high ratio could also indicate a very strict credit policy that may be turning away potential customers. Therefore, while a high receivables turnover ratio is generally desirable, it should be interpreted in the context of the company's overall business strategy.
In conclusion, Tyson Foods, Inc.'s improving receivables turnover ratio over the past five years indicates a positive trend in efficiently collecting its accounts receivable, reflecting well on its operational and financial management.
Peer comparison
Sep 30, 2023