Watts Water Technologies Inc (WTS)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,048,400 | 1,972,700 | 1,803,100 | 1,494,900 | 1,586,400 |
| Receivables | US$ in thousands | 259,800 | 233,800 | 220,900 | 197,600 | 219,800 |
| Receivables turnover | 7.88 | 8.44 | 8.16 | 7.57 | 7.22 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $2,048,400K ÷ $259,800K
= 7.88
Watts Water Technologies, Inc.'s receivables turnover ratio has exhibited a fluctuating trend over the past five years. The ratio indicates the company's efficiency in converting its accounts receivables into cash during a specific period.
The receivables turnover for 2023 stood at 7.91 times, which has decreased from 8.47 times in 2022 but remains relatively higher than the ratios observed in 2021, 2020, and 2019. This implies that the company, in 2023, took approximately 7.91 times to collect its accounts receivable balance. A higher turnover ratio generally reflects a more efficient collection process and indicates that the company is quickly converting credit sales into cash.
The decrease in the receivables turnover from 2022 to 2023 may suggest a potential weakening in the company's ability to collect outstanding receivables promptly. It is essential for the company to keep a close eye on its accounts receivable collection process and take necessary actions to maintain healthy liquidity levels.
Overall, an in-depth analysis of the trend and comparison of the receivables turnover ratio over the years provide insights into Watts Water Technologies, Inc.'s effectiveness in managing its receivables and cash flow.
Peer comparison
Dec 31, 2023