ABM Industries Incorporated (ABM)
Payables turnover
Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
---|---|---|---|---|---|---|
Cost of revenue | US$ in thousands | 8,152,500 | 7,689,700 | 7,454,900 | 6,027,700 | 5,889,500 |
Payables | US$ in thousands | 324,300 | 299,100 | 315,500 | 289,400 | 273,300 |
Payables turnover | 25.14 | 25.71 | 23.63 | 20.83 | 21.55 |
October 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $8,152,500K ÷ $324,300K
= 25.14
The payables turnover ratio for ABM Industries Incorporated has shown a fluctuating trend over the past five years, ranging from a low of 20.83 in October 2021 to a high of 25.71 in October 2023. The ratio measures how efficiently the company is managing its accounts payable by calculating the number of times payables are paid off within a year.
A higher payables turnover ratio indicates that the company is able to pay off its suppliers more quickly, which may be a positive signal of strong liquidity and effective working capital management. On the other hand, a lower ratio may suggest that the company is taking longer to pay its suppliers, potentially signaling cash flow issues or negotiation leverage with suppliers.
In the context of ABM Industries Incorporated, the payables turnover has generally been above 20 over the past five years, indicating a relatively efficient management of accounts payable. However, the fluctuations in the ratio suggest some variability in the company's payment practices over time, which could be influenced by various factors such as changes in supplier terms, business cycles, or strategic decisions regarding cash flow management. Further analysis and comparison with industry benchmarks may provide additional insights into the company's financial performance and supplier relationship management.
Peer comparison
Oct 31, 2024