Equifax Inc (EFX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,369,200 | 4,066,200 | 3,785,900 | 3,450,900 | 3,843,000 |
| Payables | US$ in thousands | 197,600 | 250,800 | 211,600 | 159,100 | 148,300 |
| Payables turnover | 22.11 | 16.21 | 17.89 | 21.69 | 25.91 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,369,200K ÷ $197,600K
= 22.11
Equifax, Inc.'s payables turnover has shown fluctuations over the past five years. The trend indicates that the company has managed to improve its payables turnover efficiency in 2023 compared to the previous year, with a ratio of 11.82. This suggests that Equifax is paying its suppliers approximately 11.82 times a year, which is a positive sign of efficient management of trade credit and obligations.
In 2022, the payables turnover ratio was 8.68, indicating a decrease in efficiency compared to the previous and following years. However, the ratio improved in 2021 to 9.36, demonstrating increased efficiency in managing payments to suppliers. The trend continued in 2020, with a further improvement to 10.92, indicating faster payment cycles.
Analysts may view Equifax's increasing payables turnover favorably, as a higher ratio implies that the company is efficiently managing its payables and is potentially benefiting from favorable credit terms with suppliers. It also reflects a prudent approach to working capital management. However, further analysis in conjunction with other financial metrics would provide a more comprehensive assessment of the company's financial health and operational efficiency.