Allegion PLC (ALLE)

Payables turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cost of revenue US$ in thousands 3,005,600 2,728,400 2,365,000 2,352,800 2,327,700
Payables US$ in thousands 259,200 280,700 259,100 220,400 221,000
Payables turnover 11.60 9.72 9.13 10.68 10.53

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $3,005,600K ÷ $259,200K
= 11.60

Allegion plc's payables turnover ratio has displayed some fluctuations over the past five years. The ratio was 7.98 in 2023, indicating that the company paid off its accounts payable approximately 8 times during the year. This represents an improvement compared to 2022 when the ratio was 6.95.

The payables turnover ratio was relatively stable in the preceding years, ranging from 6.42 in 2021 to 7.25 in 2019. A higher payables turnover ratio suggests that the company is efficiently managing its accounts payable by paying them off more frequently.

Overall, Allegion plc's increasing payables turnover ratio in 2023 reflects a more efficient management of its trade payables, which could be attributed to better cash flow management or negotiation of favorable payment terms with suppliers.