Adobe Systems Incorporated (ADBE)
Payables turnover
| Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | Nov 29, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,354,000 | 2,165,000 | 1,865,000 | 1,722,000 | 1,673,000 |
| Payables | US$ in thousands | 314,000 | 379,000 | 312,000 | 306,000 | 209,000 |
| Payables turnover | 7.50 | 5.71 | 5.98 | 5.63 | 8.00 |
December 1, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,354,000K ÷ $314,000K
= 7.50
The payables turnover ratio is a measure of how efficiently a company manages its accounts payable. It is calculated by dividing the total purchases made on credit by the average accounts payable for a period. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which can be a sign of strong liquidity and good vendor relationships.
Looking at Adobe Inc's payables turnover over the past five years, we can observe fluctuations in the ratio. In 2023, the payables turnover ratio was 7.50, indicating an increase in the speed at which Adobe Inc pays its suppliers compared to previous years. This may suggest improved efficiency in managing accounts payable and a higher turnover of payables, potentially reflecting favorable working capital management.
In 2022, the payables turnover was 5.71, reflecting a decrease from the previous year. This could indicate that Adobe Inc took longer to pay its suppliers in 2022, which may have resulted from changing payment terms or other supply chain dynamics.
In 2021, the payables turnover ratio increased to 5.98, showing a slight improvement in the management of accounts payable compared to 2022. However, the ratio decreased to 5.63 in 2020, suggesting a slowdown in the turnover of payables.
In 2019, the payables turnover ratio stood at 7.98, indicating a higher turnover of payables compared to subsequent years. This may suggest that Adobe Inc was paying its suppliers at a relatively faster pace in 2019.
Overall, the trend in Adobe Inc's payables turnover indicates some variability in the management of accounts payable over the past five years. It is important to assess the payables turnover ratio in conjunction with other financial metrics to gain a comprehensive understanding of the company's working capital management and financial performance.
Peer comparison
Dec 1, 2023