Emerson Electric Company (EMR)
Payables turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 15,670,000 | 12,829,000 | 16,448,000 | 15,472,000 | 14,415,000 |
| Payables | US$ in thousands | 1,335,000 | 1,275,000 | 1,276,000 | 2,108,000 | 1,715,000 |
| Payables turnover | 11.74 | 10.06 | 12.89 | 7.34 | 8.41 |
September 30, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $15,670,000K ÷ $1,335,000K
= 11.74
Emerson Electric Company's payables turnover ratio has shown fluctuations over the past five years. The ratio increased from 8.41 in 2020 to 12.89 in 2022, reflecting a significant improvement in the company's ability to efficiently manage its accounts payable. However, in 2023, the ratio decreased to 10.06 before increasing again to 11.74 in 2024.
A higher payables turnover ratio indicates that the company is paying its suppliers more frequently within a given period, which may suggest favorable payment terms or effective cash flow management. Conversely, a lower ratio could indicate an inefficient use of credit terms or potential liquidity issues.
Overall, Emerson Electric Company's payables turnover has generally been at healthy levels over the past five years, demonstrating a reasonably effective management of its accounts payable and relationships with suppliers. Monitoring this ratio going forward can provide insights into the company's liquidity and operational efficiency.
Peer comparison
Sep 30, 2024