Advanced Energy Industries Inc (AEIS)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,339,280 | 1,421,310 | 1,142,440 | 1,095,840 | 633,019 |
| Payables | US$ in thousands | 141,850 | 170,467 | 193,708 | 125,224 | 170,671 |
| Payables turnover | 9.44 | 8.34 | 5.90 | 8.75 | 3.71 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,339,280K ÷ $141,850K
= 9.44
The payables turnover of Advanced Energy Industries Inc. has exhibited fluctuating trends over the past five years. The company's ability to manage its payables effectively improved significantly in 2023 compared to the previous year, with a payables turnover of 7.50, indicating that the company is paying off its suppliers approximately 7.50 times during the year.
The payables turnover ratio was relatively stable between 2020 and 2022, ranging from 4.77 to 6.98. This suggests that the company was maintaining a consistent pace in settling its payables during those years.
The substantial increase in the payables turnover ratio in 2023 may indicate that Advanced Energy Industries Inc. has implemented more efficient payables management practices, possibly negotiating better payment terms with suppliers or enhancing internal processes to streamline payments.
Overall, a higher payables turnover ratio generally indicates that a company is managing its payables well and efficiently utilizing its trade credit. However, it is essential to consider industry norms and company-specific factors when interpreting this ratio in order to assess the effectiveness of Advanced Energy Industries Inc.'s payables management strategy accurately.
Peer comparison
Dec 31, 2023