Visteon Corp (VC)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,954,000 | 3,756,000 | 2,773,000 | 2,548,000 | 2,945,000 |
| Receivables | US$ in thousands | 989,000 | 838,000 | 701,000 | 662,000 | 672,000 |
| Receivables turnover | 4.00 | 4.48 | 3.96 | 3.85 | 4.38 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $3,954,000K ÷ $989,000K
= 4.00
The receivables turnover ratio measures the number of times a company converts its accounts receivable into cash during a specific period. Visteon Corp.'s receivables turnover has shown an increasing trend over the past five years, from 4.78 in 2019 to 5.37 in 2023. This indicates that the company is collecting its accounts receivable more efficiently.
A higher receivables turnover ratio signifies that Visteon is collecting payments from its customers more frequently within a year, which is a positive indicator of effective credit management and collection policies. It suggests that the company is able to convert its credit sales into cash quickly.
The improvement in the receivables turnover ratio from 2022 to 2023 indicates that Visteon has enhanced its collection processes, leading to a quicker conversion of accounts receivable into cash. This could imply better credit control, stricter payment terms, or a more proactive approach in following up with customers for timely payments.
Overall, the increasing trend in Visteon Corp.'s receivables turnover ratio reflects positively on the company's ability to efficiently manage its accounts receivables and convert them into cash, which is essential for maintaining healthy cash flows and liquidity.
Peer comparison
Dec 31, 2023