Clean Harbors Inc (CLH)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,895,280 | 4,494,240 | 4,234,760 | 3,192,000 | 2,636,360 |
| Payables | US$ in thousands | 487,286 | 451,806 | 446,629 | 359,866 | 195,878 |
| Payables turnover | 10.05 | 9.95 | 9.48 | 8.87 | 13.46 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,895,280K ÷ $487,286K
= 10.05
Clean Harbors Inc's payables turnover ratio decreased from 13.46 in December 31, 2020, to 8.87 in December 31, 2021. This significant drop suggests that the company took longer to pay off its suppliers in 2021 compared to 2020. However, there was a slight improvement in the ratio in the following years – 9.48 in 2022, 9.95 in 2023, and 10.05 in 2024, indicating a more efficient management of accounts payable over time.
While the downward trend in payables turnover from 2020 to 2021 may raise concerns about liquidity management and supplier relationships, the subsequent increase in the ratio demonstrates an improvement in the company's ability to settle its payables in a timely manner. Clean Harbors Inc should continue monitoring and managing its payables turnover effectively to ensure healthy working capital management and maintain positive relationships with its suppliers.