Baker Hughes Co (BKR)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,226,000 | 3,445,000 | 2,868,000 | 19,958,000 | 3,539,000 |
| Payables | US$ in thousands | 4,471,000 | 4,298,000 | 3,745,000 | 3,532,000 | 4,268,000 |
| Payables turnover | 0.72 | 0.80 | 0.77 | 5.65 | 0.83 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,226,000K ÷ $4,471,000K
= 0.72
The payables turnover ratio measures how efficiently a company manages its accounts payable by calculating how many times a company pays off its average accounts payable balance during a certain period. A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently.
From the data provided for Baker Hughes Co over the past five years, we can observe fluctuations in the payables turnover ratio. In 2023, the payables turnover ratio increased to 4.53 from 3.90 in 2022, indicating that the company paid off its suppliers more frequently in 2023. This may suggest improved efficiency in managing accounts payable.
Comparing the payables turnover ratio to previous years, we see that it was highest in 2020 at 4.96 and lowest in 2022 at 3.90. Despite the fluctuations, Baker Hughes Co has generally maintained a payables turnover ratio above 4, which indicates that the company has been effectively managing its accounts payable by paying suppliers in a timely manner.
Overall, the increasing trend in the payables turnover ratio suggests that Baker Hughes Co has been improving its efficiency in managing its accounts payable over the past year. The company's ability to pay off its suppliers promptly can have positive implications for relationships with vendors and cash flow management. It is essential for stakeholders to monitor this ratio to assess the company's financial health and efficiency in managing working capital.
Peer comparison
Dec 31, 2023