Smith AO Corporation (AOS)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,131,600 | 3,126,800 | 3,108,000 | 2,941,700 | 2,469,600 |
| Payables | US$ in thousands | 588,700 | 600,400 | 625,800 | 745,900 | 595,200 |
| Payables turnover | 5.32 | 5.21 | 4.97 | 3.94 | 4.15 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,131,600K ÷ $588,700K
= 5.32
Based on the data provided, the payables turnover for Smith AO Corporation has displayed a fluctuating trend over the years. The payables turnover ratio indicates how efficiently the company is managing its accounts payable. A higher payables turnover ratio generally suggests that the company is paying off its suppliers more quickly.
In 2020, Smith AO Corporation had a payables turnover ratio of 4.15, indicating that, on average, the company paid off its accounts payable approximately 4.15 times during the year. This ratio decreased slightly to 3.94 in 2021, which could suggest a potential delay in payments to suppliers.
However, there was an improvement in the payables turnover ratio in the following years. The ratio increased to 4.97 in 2022, 5.21 in 2023, and further to 5.32 in 2024. These increases in the payables turnover ratio could indicate that Smith AO Corporation improved its accounts payable management, potentially negotiating better payment terms with suppliers or focusing on improving cash flow efficiency.
Overall, the trend in the payables turnover ratio for Smith AO Corporation shows variability but indicates an improvement in managing accounts payable efficiently over the years. This analysis could suggest that the company has been more effective in managing its working capital and supplier relationships, which can have a positive impact on its financial performance and liquidity.
Peer comparison
Dec 31, 2024