Smith AO Corporation (AOS)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,126,800 | 3,108,000 | 2,941,700 | 2,469,600 | 2,543,400 |
| Payables | US$ in thousands | 600,400 | 625,800 | 745,900 | 595,200 | 509,600 |
| Payables turnover | 5.21 | 4.97 | 3.94 | 4.15 | 4.99 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,126,800K ÷ $600,400K
= 5.21
The payables turnover ratio of A.O. Smith Corp. has shown fluctuations over the past five years. The ratio increased from 3.00 in 2020 to 3.56 in 2019, indicating that the company took slightly longer to pay its creditors in 2020. However, in 2021, there was a decrease in the payables turnover ratio to 2.99, suggesting that the company improved its payment efficiency by paying suppliers more quickly. This trend continued in 2022, with the ratio slightly increasing to 3.87.
In 2023, the payables turnover ratio further improved to 3.94, indicating that A.O. Smith Corp. was able to manage its accounts payable more effectively, paying its suppliers more frequently throughout the year. Overall, the increasing trend in the payables turnover ratio over the past two years suggests that the company has been managing its accounts payable efficiently in recent years. However, the ratio should be analyzed in conjunction with other financial metrics to gain a comprehensive understanding of the company's liquidity and supplier management practices.
Peer comparison
Dec 31, 2023