Automatic Data Processing Inc (ADP)

Payables turnover

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cost of revenue	US$ in thousands	14,783,300	14,005,400	13,171,500	12,152,800	8,445,200
Payables	US$ in thousands	100,600	96,800	110,200	141,100	102,000
Payables turnover		146.95	144.68	119.52	86.13	82.80

June 30, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $14,783,300K ÷ $100,600K
= 146.95

The payables turnover ratio for Automatic Data Processing Inc has shown a positive trend over the past five years. The ratio increased from 82.80 in June 2020 to 146.95 in June 2024, indicating that the company is managing its accounts payable more efficiently.

This improvement suggests that the company is paying off its suppliers at a quicker pace, which can be advantageous as it may help build stronger relationships with suppliers and potentially lead to better terms in the future.

A rising payables turnover ratio may also indicate that the company is effectively managing its working capital and cash flow, as it is able to pay off its short-term obligations in a timely manner. This could be a sign of good financial health and efficiency in operations.

Overall, the increasing trend in Automatic Data Processing Inc's payables turnover ratio reflects positively on the company's ability to manage its accounts payable effectively.