Donaldson Company Inc (DCI)
Payables turnover
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,311,900 | 2,270,200 | 2,239,200 | 1,882,200 | 1,710,200 |
| Payables | US$ in thousands | 379,400 | 304,900 | 338,500 | 293,900 | 187,700 |
| Payables turnover | 6.09 | 7.45 | 6.62 | 6.40 | 9.11 |
July 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,311,900K ÷ $379,400K
= 6.09
The payables turnover for Donaldson Company Inc has fluctuated over the past five years, with a decreasing trend from 2018 to 2021 followed by a slight increase in 2022 and further decline in 2023. The ratio indicates how efficiently the company is managing its accounts payables by measuring the number of times the company pays off its suppliers within a given period.
A higher payables turnover ratio suggests that the company is paying off its suppliers more frequently, which could indicate efficient cash management and good relationships with suppliers. On the other hand, a lower ratio may suggest that the company is taking longer to pay its suppliers, potentially straining relationships or signaling cash flow issues.
In this case, the decreasing trend in payables turnover from 2020 to 2023 may raise concerns about the company's ability to manage its payables effectively. Further investigation into the reasons behind the fluctuations in the payables turnover ratio would provide valuable insights into the company's financial management and supplier relationships.