Garmin Ltd (GRMN)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	3,739,970	3,088,800	2,860,040	2,787,860	2,310,280
Payables	US$ in thousands	359,365	253,790	212,417	370,048	258,885
Payables turnover		10.41	12.17	13.46	7.53	8.92

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $3,739,970K ÷ $359,365K
= 10.41

To analyze Garmin Ltd's payables turnover over the past five years, we calculate the payables turnover ratio by dividing the cost of goods sold by the average accounts payable for each year.

1. In December 31, 2020, Garmin Ltd had a payables turnover ratio of 8.92 times. This implies that the company paid its accounts payable approximately 8.92 times during the year.

2. In December 31, 2021, the payables turnover ratio decreased to 7.53 times. This suggests that the company took slightly longer to pay its accounts payable compared to the previous year.

3. By December 31, 2022, Garmin Ltd's payables turnover ratio increased significantly to 13.46 times. This indicates that the company improved its efficiency in managing its payables, paying them more frequently throughout the year.

4. In December 31, 2023, the payables turnover ratio remained high at 12.17 times, showing the company's continued effectiveness in managing its payables turnover.

5. By December 31, 2024, the payables turnover ratio decreased slightly to 10.41 times but still reflects Garmin Ltd's efficient management of its payables.

Overall, Garmin Ltd has shown fluctuations in its payables turnover ratio over the past five years, with a significant improvement in 2022 and the subsequent maintenance of a relatively high turnover ratio in the following years. This indicates that the company has been effectively managing its accounts payable, ensuring timely and efficient payments to suppliers for goods and services.