Caterpillar Inc (CAT)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 42,767,000 | 41,350,000 | 35,513,000 | 29,082,000 | 36,630,000 |
| Payables | US$ in thousands | 7,906,000 | 8,689,000 | 8,154,000 | 6,128,000 | 5,957,000 |
| Payables turnover | 5.41 | 4.76 | 4.36 | 4.75 | 6.15 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $42,767,000K ÷ $7,906,000K
= 5.41
The payables turnover ratio measures how efficiently Caterpillar Inc. is managing its trade payables by calculating how many times within a period the company pays off its suppliers.
Over the past five years, Caterpillar Inc.'s payables turnover has shown fluctuations. In 2019, the company had a high payables turnover of 6.15, indicating that it was paying off its suppliers approximately 6.15 times during that year. This high ratio suggests a more rapid turnover of payables, potentially reflecting strong cash management or favorable credit terms with suppliers.
However, in the subsequent years, the payables turnover ratios decreased. In 2020, the ratio decreased to 4.75, and then in 2021, it decreased further to 4.36, indicating a slower turnover of payables in these years. This trend may suggest a change in payment policies or delays in settling obligations with suppliers.
In 2022, the payables turnover ratio improved slightly to 4.76, indicating a marginally better performance in managing payables compared to the previous year. The latest available data for 2023 shows a notable increase in the payables turnover ratio to 5.41, signaling an improvement in the efficiency of managing trade payables compared to the previous year.
Overall, although there have been fluctuations in Caterpillar Inc.'s payables turnover ratio over the past five years, the recent increase in 2023 may indicate a positive trend towards more efficient management of trade payables. However, further analysis and monitoring of this ratio is advisable to assess the company's ongoing ability to effectively manage its payables.
Peer comparison
Dec 31, 2023