Fastenal Company (FAST)
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 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 5,828,800 | 5,786,600 | 5,750,700 | 5,657,700 | 5,537,900 | 5,406,300 | 5,216,200 | 5,008,200 | 4,798,800 | 4,661,700 | 4,550,100 | 4,552,900 | 4,510,600 | 4,453,500 | 4,426,500 | 4,327,700 | 4,279,800 | 4,239,600 | 4,160,200 | 4,065,800 |
| Payables | US$ in thousands | 264,100 | 275,100 | 262,000 | 266,800 | 255,000 | 277,200 | 291,800 | 289,900 | 233,100 | 256,900 | 236,100 | 215,100 | 207,000 | 210,400 | 194,100 | 212,100 | 192,800 | 215,200 | 203,800 | 183,900 |
| Payables turnover | 22.07 | 21.03 | 21.95 | 21.21 | 21.72 | 19.50 | 17.88 | 17.28 | 20.59 | 18.15 | 19.27 | 21.17 | 21.79 | 21.17 | 22.81 | 20.40 | 22.20 | 19.70 | 20.41 | 22.11 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $5,828,800K ÷ $264,100K
= 22.07
Fastenal Co.'s payables turnover ratio has been relatively stable over the past eight quarters, ranging from 11.63 to 15.12. The payables turnover ratio measures how efficiently a company is managing its accounts payable by indicating how many times a company pays off its suppliers within a specific period.
A higher payables turnover ratio generally indicates that a company is paying off its suppliers more quickly, which may suggest favorable credit terms with suppliers or effective cash management practices. In the case of Fastenal Co., the increasing trend in the payables turnover ratio over the past year suggests that the company has been improving its ability to efficiently manage its accounts payable.
It is important to note that a very high payables turnover ratio could also indicate that a company is extremely aggressive in paying off its suppliers, which may lead to strained supplier relationships or cash flow issues. It is essential for Fastenal Co. to strike a balance between managing its payables effectively and maintaining healthy supplier relationships to support its ongoing operations and growth.
Peer comparison
Dec 31, 2023