Air Products and Chemicals Inc (APD)

Payables turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	10,103,400	10,396,500	8,080,800	5,858,100	6,004,500
Payables	US$ in thousands	1,212,900	1,120,700	736,800	546,200	519,300
Payables turnover		8.33	9.28	10.97	10.73	11.56

September 30, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $10,103,400K ÷ $1,212,900K
= 8.33

The payables turnover ratio measures how efficiently a company manages its accounts payable. It is calculated by dividing the total purchases made on credit by the average accounts payable for the period. A higher payables turnover ratio generally indicates that the company is paying its suppliers more quickly.

Air Products & Chemicals Inc.'s payables turnover has shown a declining trend over the past five years, dropping from 11.31 in 2019 to 7.28 in 2023. This suggests a decrease in the company's ability to pay off its suppliers in a timely manner.

The decreasing payables turnover may indicate a change in the company's payment policies or its relationships with suppliers. A lower payables turnover could also signal potential cash flow challenges or strained relationships with suppliers if the company is delaying payments.

It is important for stakeholders to closely monitor the payables turnover ratio as a significant change could have implications for the company's liquidity, supplier relationships, and overall financial health.