Trane Technologies plc (TT)
Receivables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 19,814,100 | 17,423,000 | 15,750,300 | 13,892,000 | 12,196,000 |
| Receivables | US$ in thousands | 3,090,200 | 2,956,800 | 2,780,100 | 2,429,400 | 2,202,100 |
| Receivables turnover | 6.41 | 5.89 | 5.67 | 5.72 | 5.54 |
December 31, 2024 calculation
Receivables turnover = Revenue ÷ Receivables
= $19,814,100K ÷ $3,090,200K
= 6.41
Trane Technologies plc has shown a steady improvement in its receivables turnover ratio over the past five years. The ratio increased from 5.54 in December 2020 to 6.41 in December 2024. This indicates that the company is collecting its accounts receivable more efficiently each year. A higher receivables turnover ratio typically suggests that the company is managing its credit policies well and collecting payments from its customers in a timely manner.
The consistent increase in the receivables turnover ratio reflects positively on the company's liquidity and operational efficiency. It suggests that Trane Technologies plc is converting its accounts receivable into cash at a faster rate, which can help improve its cash flow and working capital management. Overall, the trend in the receivables turnover ratio demonstrates the company's ability to efficiently manage its receivables and indicates a healthy financial position.