Applied Materials Inc (AMAT)
Payables turnover
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 16,276,000 | 15,670,000 | 13,929,000 | 10,979,000 | 8,222,000 |
| Payables | US$ in thousands | 1,478,000 | 1,755,000 | 1,472,000 | 1,124,000 | 958,000 |
| Payables turnover | 11.01 | 8.93 | 9.46 | 9.77 | 8.58 |
October 29, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $16,276,000K ÷ $1,478,000K
= 11.01
The payables turnover ratio of Applied Materials Inc. has fluctuated over the past five years. This ratio measures how efficiently the company manages its accounts payable by comparing the cost of goods sold to the average accounts payable during a period. A higher payables turnover ratio generally indicates that the company is paying off its suppliers more quickly.
In 2023, the payables turnover ratio increased to 9.56 from 7.86 in 2022, indicating that Applied Materials Inc. was able to pay off its suppliers at a faster rate. This may suggest improved efficiency in managing accounts payable and could signify better working capital management.
Looking further back, in 2021 the payables turnover ratio was 8.25, slightly lower than in 2020, which was 8.46, and 2019, which was 8.58. It's important to note that while the ratio decreased slightly in 2021, it still remained relatively high, indicating that the company was effectively managing its accounts payable during that period as well.
Overall, the trend in the payables turnover ratio for Applied Materials Inc. shows variability but generally remains at a level indicating efficient management of payables. This suggests that the company has been maintaining a healthy balance in managing its payable obligations in relation to its cost of goods sold over the past five years.
Peer comparison
Oct 29, 2023