American Water Works (AWK)
Payables turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 62,000 | 53,000 | 52,000 | 52,000 | 52,000 | 40,000 | 41,000 | 41,000 | 41,000 | 47,000 | 480,000 | 908,000 | 1,324,000 | 1,330,000 | 1,313,000 | 1,273,000 | 1,237,000 | 1,235,000 | 1,211,000 | 1,192,000 |
| Payables | US$ in thousands | 346,000 | 259,000 | 215,000 | 231,000 | 294,000 | 228,000 | 246,000 | 193,000 | 254,000 | 220,000 | 196,000 | 175,000 | 235,000 | 175,000 | 146,000 | 134,000 | 189,000 | 162,000 | 169,000 | 152,000 |
| Payables turnover | 0.18 | 0.20 | 0.24 | 0.23 | 0.18 | 0.18 | 0.17 | 0.21 | 0.16 | 0.21 | 2.45 | 5.19 | 5.63 | 7.60 | 8.99 | 9.50 | 6.54 | 7.62 | 7.17 | 7.84 |
December 31, 2024 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $62,000K ÷ $346,000K
= 0.18
The payables turnover ratio measures how efficiently a company is managing its accounts payable by evaluating how many times during a period a company pays off its suppliers. A higher payables turnover ratio indicates that a company is paying its suppliers more frequently.
In the case of American Water Works, the payables turnover ratio shows a declining trend from 7.84 in March 2020 to 0.18 in December 2024. This decline suggests that the company is taking longer to pay its suppliers over time, which could indicate a deterioration in its supplier relationships or potential cash flow issues.
It is important to analyze the context surrounding the significant decrease in the payables turnover ratio for American Water Works, as this could have implications for the company's financial health and operational efficiency. Further examination of the company's financial statements and industry benchmarks could provide insights into the reasons behind this trend and its potential impact on the company's overall performance.
Peer comparison
Dec 31, 2024