Best Buy Co. Inc (BBY)
Payables turnover
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Feb 1, 2020 | Nov 2, 2019 | Aug 3, 2019 | May 4, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 33,849,000 | 33,999,000 | 34,730,000 | 35,409,000 | 36,386,000 | 37,643,000 | 38,496,000 | 39,493,000 | 40,121,000 | 40,463,000 | 40,413,000 | 39,014,000 | 36,689,000 | 35,256,000 | 33,601,000 | 33,214,000 | 33,590,000 | 33,147,000 | 33,010,000 | 32,907,000 |
| Payables | US$ in thousands | 4,637,000 | 7,133,000 | 5,471,000 | 4,874,000 | 5,687,000 | 7,056,000 | 5,406,000 | 5,492,000 | 6,803,000 | 8,405,000 | 6,946,000 | 6,360,000 | 6,979,000 | 9,110,000 | 6,613,000 | 4,428,000 | 5,288,000 | 7,232,000 | 5,045,000 | 4,718,000 |
| Payables turnover | 7.30 | 4.77 | 6.35 | 7.26 | 6.40 | 5.33 | 7.12 | 7.19 | 5.90 | 4.81 | 5.82 | 6.13 | 5.26 | 3.87 | 5.08 | 7.50 | 6.35 | 4.58 | 6.54 | 6.97 |
February 3, 2024 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $33,849,000K ÷ $4,637,000K
= 7.30
The payables turnover ratio measures how efficiently a company is managing its accounts payable by evaluating the number of times a company pays off its average accounts payable balance during a specific period. A higher payables turnover ratio indicates that the company is effectively managing its payables by paying them off more frequently.
Analyzing Best Buy Co. Inc's payables turnover ratio over the last few quarters, we observe fluctuations in the ratio. The ratio ranged from a low of 3.87 to a high of 7.50 during the period under review. An increasing trend in the payables turnover ratio could signify that Best Buy is negotiating better payment terms with its suppliers or managing its working capital efficiently.
On the other hand, a decreasing trend in the payables turnover ratio may indicate that Best Buy is taking longer to pay its suppliers, which could potentially strain relationships or signal cash flow issues.
Overall, a high and stable payables turnover ratio suggests that Best Buy is managing its payables effectively, but it is important to consider other financial metrics and industry benchmarks to obtain a comprehensive assessment of the company's financial health.