Walgreens Boots Alliance Inc (WBA)
Receivables turnover
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 140,471,000 | 132,961,000 | 131,917,000 | 138,974,000 | 136,162,000 |
| Receivables | US$ in thousands | 5,381,000 | 5,017,000 | 5,663,000 | 7,132,000 | 7,226,000 |
| Receivables turnover | 26.10 | 26.50 | 23.29 | 19.49 | 18.84 |
August 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $140,471,000K ÷ $5,381,000K
= 26.10
The receivables turnover ratio measures how efficiently a company is able to collect money owed by its customers. It is calculated by dividing net credit sales by average accounts receivable. A higher receivables turnover ratio indicates that the company is collecting its receivables more quickly.
Looking at the receivables turnover of Walgreens Boots Alliance Inc over the past five years, we observe a generally increasing trend in the ratio. In 2019, the receivables turnover was 18.94, and it has steadily climbed to 25.85 in 2023. This suggests that the company has improved its efficiency in collecting receivables over the years.
A higher receivables turnover ratio could reflect a variety of factors, such as more effective credit and collection policies, improved customer payment terms, or a shift towards more cash sales. It can also indicate a lower average collection period, meaning that the company is able to convert receivables into cash more quickly.
The increasing trend in Walgreens Boots Alliance Inc's receivables turnover ratio indicates that the company's management of accounts receivable has become more efficient. This may lead to improved cash flow and working capital management, which could be viewed positively by investors and creditors.
It is important to note that while a high receivables turnover ratio is generally favorable, an excessively high ratio could suggest overly aggressive credit and collection policies that may potentially impact customer relationships. Therefore, it is important for companies to strike a balance between efficient receivables management and maintaining good customer relations.
Peer comparison
Aug 31, 2023