Watsco Inc (WSO)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,283,770 | 7,274,340 | 6,280,190 | 5,054,930 | 4,770,360 |
| Receivables | US$ in thousands | 797,832 | 747,110 | 698,456 | 535,288 | 533,810 |
| Receivables turnover | 9.13 | 9.74 | 8.99 | 9.44 | 8.94 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $7,283,770K ÷ $797,832K
= 9.13
The receivables turnover ratio for Watsco Inc. has been relatively stable over the past five years, ranging from 8.94 to 9.74 times. The ratio indicates that, on average, the company collected its accounts receivable approximately 9 times a year. A higher receivables turnover ratio generally signifies a more efficient collection process, as the company is able to convert its receivables into cash more frequently.
In the case of Watsco Inc., the consistent range of the receivables turnover ratio suggests that the company has been successful in managing its accounts receivable effectively over the years. This stable performance in collecting receivables can be seen as a positive sign of liquidity and operational efficiency within the company. However, it is essential to consider other factors and conduct a deeper analysis alongside this ratio to gain a more comprehensive understanding of the company's overall financial health and performance.