Xylem Inc (XYL)
Receivables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,364,000 | 5,522,000 | 5,195,000 | 4,876,000 | 5,249,000 |
| Receivables | US$ in thousands | 1,617,000 | 1,096,000 | 953,000 | 923,000 | 1,036,000 |
| Receivables turnover | 4.55 | 5.04 | 5.45 | 5.28 | 5.07 |
December 31, 2023 calculation
Receivables turnover = Revenue ÷ Receivables
= $7,364,000K ÷ $1,617,000K
= 4.55
The receivables turnover ratio measures the efficiency with which a company collects payment from its customers. It is calculated by dividing net credit sales by average accounts receivable.
From the data provided for Xylem Inc for the years 2019 to 2023, the receivables turnover has exhibited a fluctuating trend. The decreasing trend from 2019 to 2020 was followed by an increase in 2021, peaking at 5.45, before slightly declining in 2022 and 2023.
A higher receivables turnover ratio generally indicates that the company is effectively managing its accounts receivable and collecting payments quickly. Conversely, a lower ratio may suggest potential difficulties in collecting payments or a higher level of credit sales.
Overall, Xylem Inc's receivables turnover ratio has been within a relatively stable range over the last five years, indicating that the company is efficient in collecting payments from its customers. However, further analysis and comparison with industry benchmarks may provide a clearer insight into the effectiveness of Xylem's receivables management practices.
Peer comparison
Dec 31, 2023