CVS Health Corp (CVS)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 440,985,000 | 394,406,000 | 345,066,000 | 308,255,000 | 278,888,000 |
| Payables | US$ in thousands | 15,892,000 | 14,897,000 | 14,838,000 | 12,544,000 | 11,138,000 |
| Payables turnover | 27.75 | 26.48 | 23.26 | 24.57 | 25.04 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $440,985,000K ÷ $15,892,000K
= 27.75
To analyze CVS Health Corp's payables turnover, we can calculate the payables turnover ratio for each year based on the provided data. The payables turnover ratio is calculated by dividing the cost of goods sold by the average accounts payable.
Based on the data provided:
- In 2020, the payables turnover was 25.04
- In 2021, the payables turnover was 24.57
- In 2022, the payables turnover was 23.26
- In 2023, the payables turnover was 26.48
- In 2024, the payables turnover was 27.75
A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently within a given period. In this case, we observe fluctuations in CVS Health Corp's payables turnover over the years, with an increase from 2022 to 2024.
The increase in the payables turnover ratio from 2022 to 2024 may suggest that CVS Health Corp has been managing its accounts payable more efficiently, possibly by negotiating better payment terms with suppliers or improving inventory turnover. This trend indicates the company's ability to efficiently manage its payables, which can positively impact its working capital management and cash flow.
However, it is essential to consider other factors and analyze the trend in conjunction with other financial metrics to assess the overall financial health and performance of CVS Health Corp accurately.
Peer comparison
Dec 31, 2024