Topbuild Corp (BLD)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,464,950 | 4,336,220 | 3,104,480 | 2,426,300 | 2,387,400 |
| Payables | US$ in thousands | 469,585 | 487,114 | 461,917 | 331,710 | 307,970 |
| Payables turnover | 9.51 | 8.90 | 6.72 | 7.31 | 7.75 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,464,950K ÷ $469,585K
= 9.51
The payables turnover ratio measures how efficiently a company is managing its trade credit with suppliers by calculating the number of times a company pays off its accounts payable during a specific period.
TopBuild Corp's payables turnover has been relatively consistent over the past five years, ranging from 5.44 to 7.65. A higher payables turnover ratio indicates that the company is paying off its suppliers at a faster rate, which can be a positive indicator of financial health and liquidity.
In TopBuild Corp's case, the increasing trend in the payables turnover ratio from 5.44 in 2021 to 7.65 in 2023 suggests that the company has been managing its trade credit more efficiently over the years. This improvement demonstrates that TopBuild Corp is paying its suppliers more frequently, which may indicate strong supplier relationships and effective cash flow management.
Overall, the consistent and increasing payables turnover ratio of TopBuild Corp reflects efficient accounts payable management and a potentially healthy financial position.