Smith AO Corporation (AOS)
Payables turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 3,126,800 | 3,076,900 | 3,045,400 | 3,087,200 | 3,108,000 | 3,170,200 | 3,197,400 | 3,110,700 | 2,941,700 | 2,806,400 | 2,678,400 | 2,545,300 | 2,469,600 | 2,425,100 | 2,417,500 | 2,474,500 | 2,543,400 | 2,574,400 | 2,583,800 | 2,637,900 |
| Payables | US$ in thousands | 600,400 | 561,800 | 545,100 | 550,400 | 625,800 | 595,600 | 624,500 | 658,700 | 745,900 | 649,600 | 612,400 | 547,400 | 595,200 | 516,900 | 435,700 | 442,000 | 509,600 | 483,100 | 488,400 | 492,400 |
| Payables turnover | 5.21 | 5.48 | 5.59 | 5.61 | 4.97 | 5.32 | 5.12 | 4.72 | 3.94 | 4.32 | 4.37 | 4.65 | 4.15 | 4.69 | 5.55 | 5.60 | 4.99 | 5.33 | 5.29 | 5.36 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $3,126,800K ÷ $600,400K
= 5.21
The payables turnover ratio for A.O. Smith Corp. has shown some fluctuation over the past eight quarters. The ratio ranged from a low of 3.62 in Q1 2022 to a high of 4.33 in Q1 2023. Overall, the trend indicates that the company is, on average, paying its suppliers approximately 4 times a year.
A higher payables turnover ratio typically indicates that a company is managing its accounts payable efficiently by paying its suppliers more frequently. This could be beneficial in terms of maintaining good relationships with suppliers and potentially negotiating better terms in the future. Conversely, a lower payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could impact supplier relationships and cash flow management.
It's important for stakeholders to monitor these trends to understand how the company is managing its payables and its relationships with suppliers. Additionally, comparing the payables turnover ratio to industry benchmarks or historical performance can provide further insights into the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2023