Deluxe Corporation (DLX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,029,580 | 1,032,120 | 884,270 | 730,771 | 812,935 |
| Payables | US$ in thousands | 154,863 | 157,055 | 153,072 | 116,990 | 112,198 |
| Payables turnover | 6.65 | 6.57 | 5.78 | 6.25 | 7.25 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,029,580K ÷ $154,863K
= 6.65
Deluxe Corp.'s payables turnover has been relatively stable over the past five years, ranging from 5.78 to 7.25. The payables turnover ratio indicates how efficiently the company is managing its trade payables by paying off its suppliers. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which may indicate good relationships with suppliers or effective cash management.
In the case of Deluxe Corp., the payables turnover ratio has been consistently above 6, indicating that the company is able to efficiently use its trade payables to support its operations. A higher payables turnover ratio may also suggest that the company is stretching its payables to optimize cash flow and working capital management.
Overall, Deluxe Corp.'s payables turnover ratio demonstrates a consistent and efficient management of trade payables, which is a positive sign for the company's financial health and operational effectiveness.