Domino’s Pizza Inc (DPZ)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,751,940 | 2,888,550 | 2,669,130 | 2,522,920 | 2,216,280 |
| Payables | US$ in thousands | 106,267 | 89,715 | 91,547 | 94,499 | 111,101 |
| Payables turnover | 25.90 | 32.20 | 29.16 | 26.70 | 19.95 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,751,940K ÷ $106,267K
= 25.90
The payables turnover ratio for Dominos Pizza Inc has shown a fluctuating trend over the past five years, ranging from 19.95 to 32.20. This ratio measures how efficiently the company is managing its accounts payable by calculating the number of times a company pays off its average accounts payable balance during a period.
A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently, which can be a positive sign as it may suggest strong liquidity and efficient management of working capital. In the case of Dominos Pizza Inc, the payables turnover ratio has generally been above 25 over the past five years, implying a relatively high rate of payables turnover.
The decreasing trend from Jan 2, 2022, to Dec 29, 2019, followed by an increase in the subsequent years, may indicate changes in the company's payment practices or relationships with suppliers. It would be important to assess the reasons behind these fluctuations in the payables turnover ratio to determine if they align with the company's overall financial strategy and operational efficiency.
Peer comparison
Dec 31, 2023