The Boeing Company (BA)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 70,070,000 | 63,078,000 | 59,269,000 | 63,843,000 | 72,093,000 |
| Payables | US$ in thousands | 11,964,000 | 10,200,000 | 9,261,000 | 12,928,000 | 15,553,000 |
| Payables turnover | 5.86 | 6.18 | 6.40 | 4.94 | 4.64 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $70,070,000K ÷ $11,964,000K
= 5.86
The payables turnover ratio measures how efficiently a company manages its payments to suppliers. It is calculated by dividing the cost of goods sold by the average accounts payable balance.
Boeing Co.'s payables turnover ratio has shown fluctuations over the past five years. In 2023, the payables turnover ratio decreased to 5.86 from 6.18 in 2022. Although the ratio remains relatively high, indicating that Boeing Co. is effectively managing its accounts payable, the decrease may suggest a slightly slower rate of paying off its suppliers compared to the previous year.
Comparing the current ratio to 2021, there is a continued downward trend from 6.40 in 2021 to 5.86 in 2023. This trend indicates a less efficient management of payables over time, which could potentially lead to strained supplier relationships if not addressed.
In general, a high payables turnover ratio suggests that a company is paying its suppliers quickly, which can be beneficial for maintaining good relationships and negotiating favorable terms. However, it's essential for Boeing Co. to closely monitor this ratio and ensure that any decrease in turnover is managed effectively to maintain healthy supplier relations and avoid potential liquidity issues.
Peer comparison
Dec 31, 2023