Cal-Maine Foods Inc (CALM)
Payables turnover
| Jun 1, 2024 | Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,016,140 | 2,184,200 | 1,640,950 | 1,376,580 | 1,172,020 |
| Payables | US$ in thousands | 75,862 | 82,590 | 82,049 | 52,784 | 55,904 |
| Payables turnover | 26.58 | 26.45 | 20.00 | 26.08 | 20.96 |
June 1, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,016,140K ÷ $75,862K
= 26.58
The payables turnover ratio for Cal-Maine Foods Inc has been relatively consistent over the past five years, ranging from 20.00 to 26.58 times. This ratio measures the company's ability to manage its accounts payable effectively by paying off its suppliers in a timely manner.
A higher payables turnover ratio indicates that the company is efficiently managing its payables, either by negotiating favorable credit terms with suppliers or by making timely payments. In Cal-Maine Foods Inc's case, the ratio has generally been on the higher side, suggesting that the company has a strong ability to pay off its suppliers promptly.
However, it is important to note that a very high payables turnover ratio could also indicate that the company is not taking advantage of available credit terms and may be missing out on potential cash flow benefits. Conversely, a low ratio may indicate credit problems or inefficiencies in managing payables.
Overall, Cal-Maine Foods Inc's consistent payables turnover ratio over the past five years reflects its ability to effectively manage its accounts payable, which is a positive sign for the company's financial health and supplier relationships.