AAR Corp (AIR)
Payables turnover
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,196,600 | 232,700 | 206,200 | 193,300 | 236,000 |
| Payables | US$ in thousands | 238,000 | 158,500 | 156,400 | 127,200 | 191,600 |
| Payables turnover | 9.23 | 1.47 | 1.32 | 1.52 | 1.23 |
May 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,196,600K ÷ $238,000K
= 9.23
The payables turnover ratio measures how quickly a company pays its suppliers. A higher payables turnover ratio generally indicates that the company is paying its suppliers more quickly, which could suggest efficient working capital management.
Analyzing AAR Corp's payables turnover over the past five years reveals a fluctuating trend. In May 2024, the payables turnover ratio increased significantly to 9.23, which is a substantial improvement compared to the previous year. This sharp increase may indicate that AAR Corp has been managing its payables more efficiently, potentially negotiating better payment terms with suppliers or streamlining its payment processes.
In contrast, the payables turnover ratio was relatively low in the preceding years, with values of 1.47 in 2023, 1.32 in 2022, 1.52 in 2021, and 1.23 in 2020. These lower ratios suggest that AAR Corp took longer to pay its suppliers during those years, which could have implications for cash flow management and vendor relationships.
Overall, the significant increase in the payables turnover ratio in 2024 for AAR Corp indicates a positive development in managing supplier payments. However, it is essential to continue monitoring this ratio in the future to ensure sustainable working capital management practices and efficient operations.
Peer comparison
May 31, 2024