Colgate-Palmolive Company (CL)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	8,131,000	7,719,000	7,046,000	6,454,000	6,368,000
Payables	US$ in thousands	1,698,000	1,551,000	1,479,000	1,393,000	1,237,000
Payables turnover		4.79	4.98	4.76	4.63	5.15

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $8,131,000K ÷ $1,698,000K
= 4.79

The payables turnover ratio for Colgate-Palmolive Co. has been relatively stable over the past five years, ranging from 4.63 to 5.15. This ratio indicates how efficiently the company is managing its accounts payable by measuring how many times during a period it pays off its suppliers.

A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which could be beneficial in terms of maintaining good relationships with suppliers and possibly negotiating better terms. However, a consistently high ratio could also indicate potential cash flow challenges if the company is paying off its payables too quickly.

Conversely, a lower payables turnover ratio may suggest that the company is taking longer to pay its suppliers, which could be a sign of good cash flow management but may also indicate strained relationships with suppliers if payments are delayed.

In Colgate-Palmolive Co.'s case, the gradual decrease in the payables turnover ratio from 2019 to 2021 followed by a slight increase in 2022 and 2023 may indicate a shift in the company's payment policies or changes in its relationships with suppliers. Further analysis would be required to understand the specific factors influencing these trends and their impact on the company's overall financial performance.