Cisco Systems Inc (CSCO)

Payables turnover

		Jul 27, 2024	Apr 27, 2024	Jan 27, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 23, 2021	Oct 24, 2020	Jul 25, 2020	Apr 25, 2020	Jan 25, 2020	Oct 26, 2019
Cost of revenue (ttm)	US$ in thousands	33,222,000	33,378,000	33,793,000	34,252,000	34,078,000	33,058,000	32,042,000	31,394,000	30,817,000	30,666,000	30,699,000	30,117,000	30,133,000	29,656,000	28,951,000	29,010,000	29,202,000	29,823,000	30,706,000	31,172,000
Payables	US$ in thousands	2,304,000	2,054,000	1,848,000	2,084,000	2,313,000	2,442,000	2,329,000	2,316,000	2,281,000	2,289,000	2,101,000	2,261,000	2,362,000	2,440,000	1,867,000	2,294,000	2,218,000	2,393,000	1,935,000	2,016,000
Payables turnover		14.42	16.25	18.29	16.44	14.73	13.54	13.76	13.56	13.51	13.40	14.61	13.32	12.76	12.15	15.51	12.65	13.17	12.46	15.87	15.46

July 27, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $33,222,000K ÷ $2,304,000K
= 14.42

The payables turnover ratio measures how efficiently a company manages its accounts payable by showing how many times a company pays off its average accounts payable balance during a specific period.

Based on the data provided for Cisco Systems Inc, we observe fluctuations in the payables turnover ratio over the last few years. The payables turnover ratio has ranged from a low of 12.15 (Jan 23, 2021) to a high of 18.29 (Jan 27, 2024), indicating variability in the company's accounts payable management.

The trend in Cisco's payables turnover shows some fluctuations but generally hovers around the range of 12 to 18 times per year. These fluctuations could be attributed to various factors such as changes in payment terms with suppliers, changes in purchasing patterns, or business cycle fluctuations.

Overall, a higher payables turnover ratio signifies that Cisco is paying off its suppliers more frequently, which could indicate a strong liquidity position or good vendor relationships. On the other hand, a lower ratio could imply that Cisco is taking longer to pay its suppliers, potentially signaling cash flow issues or less favorable terms with vendors.

Analysts should continue monitoring Cisco's payables turnover ratio to assess its effectiveness in managing accounts payable and to understand how changes in this ratio may impact the company's financial health and operational efficiency.