Franklin Electric Co Inc (FELE)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,819,790 | 1,803,720 | 1,487,070 | 1,126,220 | 1,196,840 |
| Payables | US$ in thousands | 152,419 | 139,266 | 164,758 | 95,903 | 82,593 |
| Payables turnover | 11.94 | 12.95 | 9.03 | 11.74 | 14.49 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,819,790K ÷ $152,419K
= 11.94
The payables turnover ratio of Franklin Electric Co., Inc. has fluctuated over the past five years. The ratio indicates how effectively the company is managing its trade payables by comparing the cost of goods sold to its average accounts payable outstanding during a period.
In 2023, the payables turnover ratio decreased to 8.98 from 9.71 in 2022, indicating that the company took longer to pay its suppliers compared to the previous year. This could be a sign of a more lenient or relaxed approach to managing payables.
In 2021, the payables turnover ratio significantly increased to 6.59 from 8.49 in 2020. This rapid increase could suggest that the company improved its efficiency in paying off its suppliers more promptly or negotiated better payment terms.
Furthermore, in 2019, the payables turnover ratio was relatively high at 10.73, indicating that the company was managing its payables efficiently by quickly settling its obligations to suppliers.
Overall, fluctuations in the payables turnover ratio may reflect changes in the company's payment policies, supplier relationships, or internal processes. Further analysis and comparison with industry benchmarks would provide more insight into the company's payables management practices and financial performance.
Peer comparison
Dec 31, 2023