Generac Holdings Inc (GNRC)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,547,130 | 3,467,170 | 3,851,930 | 2,914,930 | 1,928,430 |
| Payables | US$ in thousands | 458,693 | 340,719 | 446,050 | 674,208 | 330,247 |
| Payables turnover | 7.73 | 10.18 | 8.64 | 4.32 | 5.84 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,547,130K ÷ $458,693K
= 7.73
Generac Holdings Inc's payables turnover ratio measures the company's efficiency in managing its accounts payables by indicating how quickly it pays off its suppliers.
The trend in payables turnover ratio for Generac over the last five years shows some fluctuations. In December 2020, the payables turnover ratio was 5.84, which decreased to 4.32 in December 2021. However, there was a significant increase in the ratio to 8.64 in December 2022, followed by a further increase to 10.18 in December 2023. In December 2024, the payables turnover ratio decreased slightly to 7.73.
A high payables turnover ratio indicates that the company is efficiently managing its payments to suppliers, potentially taking advantage of discounts for early payment. On the other hand, a low ratio may suggest that the company takes longer to pay its suppliers, which could strain supplier relationships or indicate potential liquidity issues.
Overall, the trend in Generac's payables turnover ratio indicates variability in the company's payment practices over the past five years. It would be essential for the company to analyze the underlying reasons for these fluctuations to ensure it maintains a healthy balance in managing its accounts payables effectively.
Peer comparison
Dec 31, 2024