Calavo Growers Inc (CVGW)
Payables turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 977,292 | 1,188,600 | 1,062,700 | 1,066,850 | 1,127,510 |
| Payables | US$ in thousands | 15,537 | 10,436 | 9,794 | 9,384 | 17,421 |
| Payables turnover | 62.90 | 113.89 | 108.51 | 113.69 | 64.72 |
October 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $977,292K ÷ $15,537K
= 62.90
The payables turnover ratio measures how efficiently a company manages its accounts payable. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which may be a signal of strong liquidity or good working capital management.
Looking at the payables turnover data for Calavo Growers, Inc, there is a noticeable fluctuation over the past five years. In 2023, the payables turnover ratio was 58.05, which is a significant decrease from the previous year. This suggests that Calavo Growers, Inc took longer to pay its suppliers in 2023 compared to 2022.
It's important to note that a very high payables turnover ratio can sometimes indicate that a company is not taking full advantage of the credit terms offered by its suppliers, potentially affecting relationships and future credit availability. Conversely, a very low payables turnover ratio may suggest that a company is using its suppliers as a source of financing, which could pose a risk if suppliers tighten credit terms.
In conclusion, while the payables turnover ratio for Calavo Growers, Inc has shown fluctuations over the years, it is essential to consider the company's payment policies and its relationship with suppliers in order to fully understand the implications of these ratios.