Aramark Holdings (ARMK)

Payables turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	16,825,400	18,178,700	15,307,300	11,563,300	12,732,600
Payables	US$ in thousands	1,394,010	1,271,860	1,322,940	919,090	663,455
Payables turnover		12.07	14.29	11.57	12.58	19.19

September 30, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $16,825,400K ÷ $1,394,010K
= 12.07

The payables turnover ratio measures how efficiently Aramark Holdings is managing its accounts payable by paying off its suppliers. A higher payables turnover ratio indicates that the company is taking less time to pay off its suppliers, which can be a sign of good financial health and strong supplier relationships.

Analyzing the trend of Aramark Holdings' payables turnover ratio over the past five years, we observe fluctuations in the ratio. In 2020, the payables turnover was the highest at 19.19, indicating that the company paid its suppliers more frequently compared to the following years. The ratio decreased in 2021 to 12.58, suggesting a slight increase in the time taken to pay off suppliers.

In 2022, the payables turnover ratio decreased further to 11.57, potentially indicating a longer payment cycle for the company. However, in 2023, the ratio increased to 14.29, showing an improvement in managing accounts payable efficiency.

In the most recent period ending September 30, 2024, the payables turnover ratio stands at 12.07, which is still lower than the ratio observed in 2020 but higher than the ratios in 2022 and 2023. This suggests that Aramark Holdings may be taking slightly longer to pay off its suppliers compared to the peak efficiency seen in 2020.

Overall, the fluctuation in Aramark Holdings' payables turnover ratio indicates varying levels of efficiency in managing accounts payable over the years. Further analysis would be needed to understand the factors driving these fluctuations and assess the impact on the company's financial health and supplier relationships.