Goodyear Tire & Rubber Co (GT)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 20,148,000 | 19,925,000 | 16,514,000 | 12,913,000 | 14,143,000 |
| Payables | US$ in thousands | 4,326,000 | 4,803,000 | 4,148,000 | 2,945,000 | 2,908,000 |
| Payables turnover | 4.66 | 4.15 | 3.98 | 4.38 | 4.86 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $20,148,000K ÷ $4,326,000K
= 4.66
The payables turnover ratio measures how efficiently a company is managing its trade payables. A higher payables turnover ratio indicates that the company is paying its suppliers more quickly, which can be a positive sign of strong liquidity management.
Analyzing Goodyear Tire & Rubber Co.'s payables turnover over the past five years, we can observe fluctuations in the ratio. The payables turnover ratio was 3.83 in 2023, which increased compared to the previous year's ratio of 3.53 in 2022. This implies that in 2023, the company was able to honor its trade payables more efficiently than in the previous year.
Looking further back, in 2021, the payables turnover ratio was 3.30, indicating a relatively lower efficiency in managing trade payables compared to 2020 (3.51) and 2019 (3.99). It suggests that in 2021, the company took longer to pay its suppliers compared to the previous years.
Overall, Goodyear Tire & Rubber Co.'s payables turnover ratio has shown variability over the past five years, with fluctuations that may indicate changes in the company's payment policies or relations with suppliers. It is essential for stakeholders to monitor these changes to understand how effectively the company is managing its working capital and supplier relationships.