Embecta Corp (EMBC)

Payables turnover

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
Cost of revenue (ttm)	US$ in thousands	765,900	753,300	769,400	747,800	724,300	355,100	342,900	320,900	246,200
Payables	US$ in thousands	133,500	118,500	91,100	99,700	126,600	124,700	126,800	106,900	107,900	64,300	50,800	58,100
Payables turnover		5.74	6.36	8.45	7.50	5.72	2.85	2.70	3.00	2.28

September 30, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $765,900K ÷ $133,500K
= 5.74

The payables turnover ratio measures how efficiently a company is managing its trade credit by calculating how many times a company pays off its accounts payable within a specific period. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently.

Analyzing Embecta Corp's payables turnover over the past few quarters, we can observe fluctuations in the ratio. In the most recent quarter, the payables turnover was 5.74, which suggests that the company paid its accounts payable approximately 5.74 times during that quarter. This ratio has been trending upwards from the previous quarter, indicating an improvement in the management of trade credit.

Looking further back, there was a significant increase in payables turnover in the Mar 31, 2024, quarter compared to the Dec 31, 2023, quarter, suggesting that the company became more efficient in paying off its suppliers during that period.

However, it is important to note the historical trend of the payables turnover ratio for Embecta Corp, which has shown some variability. The company experienced a peak in payables turnover in the Mar 31, 2024, quarter, followed by a decline in the Jun 30, 2024 quarter. This could be a sign of changes in the company's payment policies or the nature of its supplier relationships.

Overall, the analysis of Embecta Corp's payables turnover ratio indicates fluctuations over time, with some quarters showing improved efficiency in managing trade credit while others showing variability. It would be beneficial for stakeholders to further investigate the reasons behind these fluctuations to assess the company's financial health and management of accounts payable.