Best Buy Co. Inc (BBY)
Payables turnover
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 33,849,000 | 36,386,000 | 40,121,000 | 36,689,000 | 33,590,000 |
| Payables | US$ in thousands | 4,637,000 | 5,687,000 | 6,803,000 | 6,979,000 | 5,288,000 |
| Payables turnover | 7.30 | 6.40 | 5.90 | 5.26 | 6.35 |
February 3, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $33,849,000K ÷ $4,637,000K
= 7.30
The payables turnover ratio for Best Buy Co. Inc has shown a positive trend over the past five years. The ratio has increased steadily from 5.26 in January 2021 to 7.30 in February 2024. This indicates that the company is managing its accounts payable more efficiently over time, reflecting a shorter period within which it pays off its suppliers.
A higher payables turnover ratio generally indicates that a company is paying its suppliers more quickly, which can be favorable in terms of maintaining good relationships with suppliers and potentially even negotiating better terms. Furthermore, a rising payables turnover ratio may also suggest improved liquidity and working capital management within the organization.
Overall, the increasing trend in Best Buy's payables turnover ratio implies that the company has been successful in optimizing its accounts payable processes and enhancing its financial performance in recent years.