ESAB Corp (ESAB)
Payables turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 1,759,015 | 1,764,130 | 1,743,775 | 1,720,981 | 1,707,950 | |||
| Payables | US$ in thousands | 306,593 | 302,630 | 333,166 | 355,333 | 316,265 | 320,179 | 359,996 | 368,999 |
| Payables turnover | 5.74 | 5.83 | 5.23 | 4.84 | 5.40 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,759,015K ÷ $306,593K
= 5.74
ESAB Corp's payables turnover has been fluctuating over the five quarters provided. The payables turnover ratio measures how efficiently a company is managing its accounts payable by revealing how many times a company pays off its average accounts payable balance in a given period.
The payables turnover ratio for ESAB Corp ranged from a low of 4.84 in Q1 2023 to a high of 5.83 in Q3 2023. This indicates that ESAB Corp paid off its accounts payable balances 4.84 to 5.83 times during the respective quarters. Generally, a higher payables turnover ratio indicates that the company is managing its payables more efficiently.
The average payables turnover ratio over the five quarters is approximately 5.24. This suggests that ESAB Corp has been effectively managing its accounts payable, paying off its suppliers relatively quickly compared to the industry average.
It is essential for ESAB Corp to monitor its payables turnover ratio regularly to ensure that it remains at an optimal level, balancing efficient cash flow management with maintaining good relationships with suppliers. Further analysis of the company's financial performance and industry benchmarks can provide more insights into ESAB Corp's payables management effectiveness.
Peer comparison
Dec 31, 2023