Frontdoor Inc (FTDR)

Payables turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cost of revenue US$ in thousands 895,000 952,000 818,000 758,000 687,000
Payables US$ in thousands 76,000 80,000 66,000 55,000 48,000
Payables turnover 11.78 11.90 12.39 13.78 14.31

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $895,000K ÷ $76,000K
= 11.78

The payables turnover ratio measures how efficiently a company is managing its accounts payable by evaluating how many times during a period the company pays off its suppliers. A higher payables turnover ratio indicates that the company is paying its vendors more frequently.

Frontdoor Inc. has shown a decreasing trend in payables turnover over the past five years, dropping from 14.31 in 2019 to 11.78 in 2023. This suggests that the company is taking longer to pay off its suppliers in more recent years.

A decreasing payables turnover ratio can indicate that the company is taking advantage of extended payment terms with its suppliers or facing liquidity issues that are causing delays in settling its payables. This could potentially strain relationships with suppliers if payment terms are not being met promptly.

It is essential for Frontdoor Inc. to monitor and analyze its payables turnover ratio to ensure effective management of its accounts payable and maintain strong supplier relationships for the long-term sustainability of the business.


Peer comparison

Dec 31, 2023

Company name
Symbol
Payables turnover
Frontdoor Inc
FTDR
11.78
ABM Industries Incorporated
ABM
25.71
Airbnb Inc
ABNB
12.08
Rollins Inc
ROL
52.54