Cabot Corporation (CBT)
Payables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,092,000 | 3,436,000 | 2,610,000 | 2,114,000 | 2,652,000 |
| Payables | US$ in thousands | 438,000 | 533,000 | 480,000 | 316,000 | 390,000 |
| Payables turnover | 7.06 | 6.45 | 5.44 | 6.69 | 6.80 |
September 30, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,092,000K ÷ $438,000K
= 7.06
The payables turnover ratio measures the efficiency with which a company manages its accounts payable. It is calculated by dividing the cost of goods sold by the average accounts payable over a specific period. A higher payables turnover ratio generally indicates that the company is paying its suppliers more frequently, which may signal good liquidity.
Looking at the historical data for Cabot Corp., the payables turnover has exhibited fluctuations over the past five years. In 2023, the payables turnover ratio reached 7.06, marking an increase from the previous year's 6.45. This indicates that the company paid its suppliers more frequently relative to its cost of goods sold. This could be a positive sign of efficient management of accounts payable and liquidity.
Comparing to earlier years, the payables turnover ratio has generally been relatively high, with a peak in 2020 at 6.69, and a low in 2021 at 5.44. These variations suggest changes in the company's payment practices over the years, reflecting fluctuations in the management of its accounts payable.
Overall, the upward trend in the payables turnover ratio for Cabot Corp. from 2022 to 2023 indicates a potential improvement in the company's management of its accounts payable, potentially leading to better liquidity and financial efficiency. However, a comprehensive analysis should also consider the company's industry benchmarks and underlying reasons for the changes in the ratio.
Peer comparison
Sep 30, 2023