West Pharmaceutical Services Inc (WST)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,918,500 | 2,886,900 | 2,831,600 | 2,146,900 | 1,839,900 |
| Receivables | US$ in thousands | 512,000 | 507,400 | 489,000 | 385,300 | 319,300 |
| Receivables turnover | 5.70 | 5.69 | 5.79 | 5.57 | 5.76 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $2,918,500K ÷ $512,000K
= 5.70
The receivables turnover ratio for West Pharmaceutical Services, Inc. has shown relatively consistent performance over the past five years, ranging from 5.57 to 5.79. This ratio indicates that, on average, the company collects its accounts receivable approximately 5.7 times per year.
A higher receivables turnover ratio generally suggests that the company is efficient in converting its credit sales into cash, which is a positive indication of effective credit management and collection practices.
However, it is important to note that a stable ratio over the years may also signal that the company's credit policies have remained relatively consistent.
Overall, a consistent and relatively high receivables turnover ratio for West Pharmaceutical Services, Inc. indicates a healthy financial position and efficient management of accounts receivable.
Peer comparison
Dec 31, 2023