Greif Bros Corporation (GEF)
Payables turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,756,300 | 5,796,000 | 5,137,000 | 4,259,600 | 4,259,300 |
| Payables | US$ in thousands | 497,800 | 561,300 | 704,500 | 450,700 | 435,200 |
| Payables turnover | 9.55 | 10.33 | 7.29 | 9.45 | 9.79 |
October 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,756,300K ÷ $497,800K
= 9.55
The payables turnover ratio measures how efficiently a company is managing its accounts payable by comparing the cost of goods sold to the average accounts payable during a certain period. A higher payables turnover ratio indicates that the company is paying off its suppliers more quickly.
Examining the payables turnover ratio for Greif Inc from 2019 to 2023, we observe fluctuations. In 2020, the payables turnover was 7.99, implying that the company took approximately 7.99 times to pay off its suppliers during that year. The ratio then increased to 8.35 in 2019, indicating a slight improvement in the company's ability to manage its payables. However, in 2021, there was a decrease to 6.34, suggesting that the company took longer to pay off its suppliers relative to the cost of goods sold. This was followed by an increase to 9.02 in 2022, indicating that the company improved its payables turnover significantly. In the most recent period, ending in October 2023, the ratio was 8.18, demonstrating a slight decrease in the speed of payables turnover compared to the previous year.
The fluctuations in the payables turnover ratio may indicate changes in Greif Inc's payment policies, supplier relationships, or the company's ability to manage its working capital. Further analysis of the company's financial statements and industry benchmarks may provide additional insights into the factors driving these changes in the payables turnover ratio.