Valvoline Inc (VVV)
Receivables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,440,900 | 1,232,700 | 2,945,000 | 2,375,000 | 2,390,000 |
| Receivables | US$ in thousands | 81,300 | 66,100 | 65,300 | 433,000 | 401,000 |
| Receivables turnover | 17.72 | 18.65 | 45.10 | 5.48 | 5.96 |
September 30, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $1,440,900K ÷ $81,300K
= 17.72
The receivables turnover ratio measures how efficiently a company is able to collect cash from its customers in relation to its credit sales. A higher receivables turnover ratio generally indicates better efficiency in collecting receivables.
Valvoline Inc's receivables turnover ratio has shown a consistent upward trend over the past five years, increasing from 5.96 in 2019 to 17.76 in 2023. This indicates an improvement in the company's ability to collect cash from its credit sales.
The significant increase in receivables turnover from 2020 to 2023 may be attributed to the company's effective credit management, improved collection processes, and possibly stricter credit policies. Valvoline Inc's ability to convert its receivables into cash has noticeably strengthened, suggesting better management of its accounts receivable and a potential decrease in the average collection period.
Overall, the increasing trend in Valvoline Inc's receivables turnover ratio indicates a positive development in the company's receivables management and suggests efficient use of its resources in collecting cash from customers.
Peer comparison
Sep 30, 2023