Air Products and Chemicals Inc (APD)

Payables turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	9,238,600	10,103,400	10,396,500	8,080,800	5,858,100
Payables	US$ in thousands	1,451,600	1,212,900	1,120,700	736,800	546,200
Payables turnover		6.36	8.33	9.28	10.97	10.73

September 30, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $9,238,600K ÷ $1,451,600K
= 6.36

Air Products and Chemicals Inc's payables turnover has exhibited a declining trend over the past five years. In Sep 2020, the payables turnover stood at 10.73, and since then, it has gradually decreased to 6.36 in Sep 2024. This indicates that the company's efficiency in managing its accounts payable has weakened over the period.

A lower payables turnover ratio suggests that the company is taking longer to pay its suppliers, which could potentially strain supplier relationships if extended payment terms are being employed. It may also indicate a deterioration in the company's liquidity position if it is stretching payables too far.

Overall, Air Products and Chemicals Inc's decreasing payables turnover ratio implies a need for closer scrutiny of its accounts payable management practices to ensure optimal utilization of cash resources and maintain healthy supplier relationships.