Commercial Metals Company (CMC)

Payables turnover

		Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019
Cost of revenue (ttm)	US$ in thousands	7,296,300	5,400,750	5,521,840	5,573,740	5,681,610	7,745,260	7,817,390	7,789,870	7,624,840	7,389,340	6,957,550	6,558,360	6,141,400	5,654,460	5,229,110	5,124,080	5,089,510	5,168,780	5,406,940	5,516,810
Payables	US$ in thousands	350,550	303,057	367,944	343,831	364,390	382,482	422,814	396,560	428,055	492,947	414,025	424,919	450,723	340,238	309,413	252,953	266,102	230,280	275,491	243,857
Payables turnover		20.81	17.82	15.01	16.21	15.59	20.25	18.49	19.64	17.81	14.99	16.80	15.43	13.63	16.62	16.90	20.26	19.13	22.45	19.63	22.62

August 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $7,296,300K ÷ $350,550K
= 20.81

The payables turnover ratio for Commercial Metals Company has shown some fluctuations over the past few years. The ratio measures how efficiently the company is managing its trade payables by indicating the number of times the company pays off its suppliers during a specific period.

Based on the data provided, the payables turnover ratio has ranged between 13.63 and 22.62 over the past few years. The ratio peaked at 22.62 in the third quarter of 2019, indicating that the company was able to pay off its suppliers 22.62 times during that period. This might imply that Commercial Metals was effectively managing its payables and maintaining good relationships with its suppliers at that time.

The payables turnover ratio decreased in the following quarters but stabilized around the range of 15 to 20 in recent periods. This suggests that the company may have adjusted its payment practices or had changes in its supplier relationships. A decreasing payables turnover ratio could indicate that the company is taking longer to pay off its suppliers, potentially due to cash flow constraints or strategic reasons.

Overall, it is important for investors and analysts to monitor the payables turnover ratio over time to assess the company's liquidity, supplier management practices, and financial health. Fluctuations in this ratio can provide insights into the company's operational efficiency and relationships with its suppliers.