General Motors Company (GM)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	2,494,000	1,092,000	109,459,000	105,425,000	120,031,000
Payables	US$ in thousands	28,114,000	27,486,000	20,391,000	19,928,000	21,018,000
Payables turnover		0.09	0.04	5.37	5.29	5.71

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $2,494,000K ÷ $28,114,000K
= 0.09

The payables turnover ratio measures how efficiently a company is managing its trade payables by comparing the cost of goods sold to the average accounts payable balance. A higher payables turnover ratio indicates that the company is efficiently paying its suppliers and managing its working capital.

Looking at General Motors Company's payables turnover from 2019 to 2023, the trend shows some fluctuation. The payables turnover ratio decreased from 5.26 in 2019 to 4.89 in 2020, possibly indicating a slower rate of paying suppliers relative to the cost of goods sold. However, in 2021, the ratio increased to 4.93, and then further increased to 4.62 in 2022 and 5.03 in 2023.

The increase in the payables turnover from 2020 to 2023 suggests that General Motors Company may have been able to negotiate more favorable payment terms with its suppliers or has become more efficient in managing its accounts payable. This could positively impact the company's cash flow and working capital management.

Overall, the upward trend in payables turnover ratio indicates that General Motors Company has been effectively managing its trade payables in recent years, potentially leading to improved financial flexibility and liquidity. However, it's essential to consider other factors and ratios in conjunction with the payables turnover ratio for a comprehensive analysis of the company's financial performance.