Avanos Medical Inc (AVNS)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	681,100	745,400	727,800	745,300	714,500
Payables	US$ in thousands	56,300	67,900	56,400	67,600	83,000
Payables turnover		12.10	10.98	12.90	11.03	8.61

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $681,100K ÷ $56,300K
= 12.10

The payables turnover ratio for Avanos Medical Inc has fluctuated over the past five years, ranging from 3.56 to 6.74. This ratio measures how efficiently the company is managing its accounts payable by evaluating the number of times a company pays off its suppliers during a specific period.

In 2023, the payables turnover ratio was 5.21, indicating that Avanos Medical Inc paid its suppliers approximately 5.21 times during the year. This suggests a moderate level of efficiency in managing its accounts payable compared to previous years.

The decreasing trend from 2021 to 2022 followed by a slight increase in 2023 may indicate that the company is taking longer to pay off its suppliers compared to the previous year but is still managing its payables effectively. However, further analysis is needed to understand the reasons behind these fluctuations and whether they are in line with industry norms or company-specific strategies.

Overall, the payables turnover ratio provides insight into Avanos Medical Inc's ability to efficiently manage its payment obligations to suppliers, and monitoring changes in this ratio over time can help assess the company's financial health and operational efficiency in managing its working capital.