Amgen Inc (AMGN)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 18,097,000 | 14,987,000 | 14,422,000 | 7,343,000 | 5,514,000 |
| Payables | US$ in thousands | 1,590,000 | 1,572,000 | 1,366,000 | 1,421,000 | 1,371,000 |
| Payables turnover | 11.38 | 9.53 | 10.56 | 5.17 | 4.02 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $18,097,000K ÷ $1,590,000K
= 11.38
The payables turnover ratio reflects how efficiently AMGEN Inc. is managing its trade credit and paying its suppliers. The trend in the payables turnover ratio over the past five years shows a consistent improvement, indicating that the company is enhancing its efficiency in paying off its obligations to suppliers.
AMGEN Inc.'s payables turnover increased from 3.18 in 2019 to 5.32 in 2023, showcasing a positive trend of more frequent payments to suppliers. This indicates that the company is managing its accounts payable effectively, potentially negotiating better terms with suppliers, or streamlining its payment processes.
The increasing payables turnover ratio suggests that AMGEN Inc. is paying off its suppliers at a faster rate, which could lead to improved relationships with suppliers, discounts for early payments, and reduced reliance on external financing. This trend reflects positively on the company's liquidity and ability to meet its short-term obligations in a timely manner.
Overall, the upward trend in AMGEN Inc.'s payables turnover ratio indicates an improvement in the company's working capital management and operational efficiency related to managing its payables effectively.
Peer comparison
Dec 31, 2023