Charles River Laboratories (CRL)

Payables turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cost of revenue US$ in thousands 1,316,390 962,393 827,224 759,312 662,852
Payables US$ in thousands 140,337 168,937 205,915 198,130 122,475
Payables turnover 9.38 5.70 4.02 3.83 5.41

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,316,390K ÷ $140,337K
= 9.38

The payables turnover ratio, which measures how efficiently a company is managing its payables, provides insight into how quickly a company is paying off its suppliers.

Analyzing Charles River Laboratories' payables turnover over the past five years, we observe fluctuations in the ratio.

In December 2020, the payables turnover ratio was 5.41, indicating that the company was paying off its suppliers approximately 5.41 times during the year. This suggests moderate efficiency in managing payables.

By December 2021, the payables turnover ratio decreased to 3.83, indicating a slowdown in the payment of suppliers relative to the previous year. This could suggest that the company was taking longer to settle its payables.

In December 2022, the ratio slightly improved to 4.02, showing a slight increase in the pace of paying off suppliers compared to the previous year.

By December 2023, the payables turnover ratio increased significantly to 5.70, indicating that the company had accelerated its payments to suppliers. This implies improved efficiency in managing payables.

In the most recent period ending December 2024, the payables turnover ratio surged to 9.38, reflecting a substantial increase in the speed of paying suppliers. This could indicate that the company managed its payables exceptionally well during that year.

Overall, fluctuations in Charles River Laboratories' payables turnover ratio suggest varying levels of efficiency in managing payables over the past five years. It would be essential for the company to monitor and optimize its payables management to ensure healthy supplier relationships and efficient cash flow management in the future.