Api Group Corp (APG)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,840,000 | 4,988,000 | 4,844,000 | 3,001,000 | 2,831,000 |
| Payables | US$ in thousands | 497,000 | 472,000 | 490,000 | 236,000 | 150,000 |
| Payables turnover | 9.74 | 10.57 | 9.89 | 12.72 | 18.87 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,840,000K ÷ $497,000K
= 9.74
The payables turnover ratio for Api Group Corp over the period from December 31, 2020, to December 31, 2024, reflects noteworthy changes in the company's payment practices to its suppliers. In 2020, the ratio was significantly high at 18.87, indicating that the company paid its suppliers relatively quickly and was settling its accounts payable approximately 18.87 times within the fiscal year. This high turnover suggests a prompt payment strategy or efficient cash flow management during that period.
In 2021, the ratio decreased substantially to 12.72, implying a reduction in the frequency of payments or an extension in the time taken to settle payables. Such a decline may reflect changes in the company's credit policies, supplier negotiations, or liquidity positioning, leading to longer payment cycles.
The trend continued into 2022, with the ratio declining further to 9.89. This downward movement indicates a continued extension in the payment cycle, potentially suggesting a strategic decision to optimize working capital or manage cash reserves more effectively. It may also reflect shifts in supplier terms or contractual obligations.
In 2023, the ratio experienced a slight increase to 10.57, indicating a modest acceleration in payables turnover compared to the prior year. This could denote a slight tightening of payment cycles or improved cash position enabling slightly quicker settlements, though the ratio remains below previous years' levels.
In the most recent period, 2024, the ratio marginally decreased again to 9.74, close to the 2022 level, which suggests a stabilization of payables management around this rate. This indicates that the company continues to extend its payment periods relative to the early years but has settled into a more consistent approach toward supplier payments.
Overall, the trend of declining payables turnover ratios from 2020 to 2022 suggests a strategic shift toward longer supplier payment periods, with a slight reversal and stabilization occurring in 2023 and 2024. These movements may reflect adjustments in liquidity management strategies, supplier negotiations, or operational policies. Patrons of this metric should consider these ratios in the context of overall cash flow and working capital policies to interpret the company's operational efficiency and financial health accurately.
Peer comparison
Dec 31, 2024