HF Sinclair Corp (DINO)
Payables turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | ||
|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 26,377,290 | 27,061,360 | 28,479,130 | 30,767,430 | 31,173,690 |
| Payables | US$ in thousands | 2,205,760 | 2,366,270 | 2,001,220 | 2,109,240 | 2,334,110 |
| Payables turnover | 11.96 | 11.44 | 14.23 | 14.59 | 13.36 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $26,377,290K ÷ $2,205,760K
= 11.96
The payables turnover ratio measures how efficiently HF Sinclair Corp. is managing its accounts payable by analyzing how many times the company pays off its suppliers in a given period.
Analyzing the data provided, we see that the payables turnover ratio has been fluctuating over the past eight quarters. In Q1 2022, the ratio was the lowest at 6.49, indicating that the company took approximately 6.49 quarters to pay off its suppliers. However, as of Q2 and Q3 2022, the ratio improved significantly to 7.70 and 11.79, respectively.
During the last two quarters of 2022, HF Sinclair Corp. continued to improve its payables turnover ratio, reaching 13.17 in Q4 2022. This trend of efficiency in managing accounts payable continued into 2023, with the ratio further increasing to 14.01 in Q2 2023 and 14.41 in Q1 2023.
The increasing trend in the payables turnover ratio indicates that HF Sinclair Corp. is managing its accounts payable more effectively and potentially negotiating better payment terms with its suppliers. However, while a higher payables turnover ratio generally indicates efficient management of payables, it is essential to consider the industry standards and compare the company's ratio with its peers for a more accurate assessment of its performance in this area.