Generac Holdings Inc (GNRC)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,467,170 | 3,851,930 | 2,914,930 | 1,928,430 | 1,766,310 |
| Payables | US$ in thousands | 340,719 | 446,050 | 674,208 | 330,247 | 261,977 |
| Payables turnover | 10.18 | 8.64 | 4.32 | 5.84 | 6.74 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,467,170K ÷ $340,719K
= 10.18
Generac Holdings Inc's payables turnover ratio has exhibited fluctuations over the past five years. The payables turnover ratio increased from 5.37 in 2019 to 7.80 in 2023, indicating that the company is paying its suppliers more frequently in 2023 compared to previous years. This may suggest improved cash management practices or potentially more favorable credit terms negotiated with suppliers.
It is important to note that a higher payables turnover ratio could also indicate that the company is taking longer to pay its vendors, which may strain relationships or result in potential penalties. The significant increase in payables turnover from 2022 to 2023 suggests a notable improvement in managing supplier payments.
Overall, a higher payables turnover ratio can be a positive indicator of efficient working capital management if achieved without negatively impacting vendor relationships or incurring additional costs. It is essential for Generac Holdings Inc to monitor this ratio closely to ensure a balance between optimizing cash flow and maintaining healthy supplier relationships.
Peer comparison
Dec 31, 2023