Dow Inc (DOW)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 42,330,000 | 50,574,000 | 46,307,000 | 33,346,000 | 36,657,000 |
| Payables | US$ in thousands | 6,326,000 | 7,216,000 | 8,416,000 | 5,889,000 | 5,953,000 |
| Payables turnover | 6.69 | 7.01 | 5.50 | 5.66 | 6.16 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $42,330,000K ÷ $6,326,000K
= 6.69
The payables turnover ratio measures how efficiently a company is managing its trade payables. A higher ratio indicates that the company is paying its suppliers more frequently, while a lower ratio suggests that payments are being made less often.
Based on the data provided, Dow Inc's payables turnover has fluctuated over the past five years. In 2023, the payables turnover was 6.28, which decreased from 6.70 in 2022. This decline may indicate that the company took longer to pay its suppliers in 2023 compared to the previous year.
Furthermore, comparing the payables turnover to previous years, it can be observed that the ratio was higher in 2022 and 2019. This suggests that Dow Inc was more efficient in managing its trade payables in those years.
Overall, the trend in Dow Inc's payables turnover indicates some variability in the management of trade payables over the past five years. Further analysis of the company's payment policies and supplier relationships may be necessary to fully understand the factors driving these changes in the payables turnover ratio.
Peer comparison
Dec 31, 2023