Hologic Inc (HOLX)
Payables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,958,900 | 1,865,400 | 1,836,500 | 1,548,900 | 2,196,400 |
| Payables | US$ in thousands | 175,200 | 197,700 | 215,900 | 178,800 | 186,500 |
| Payables turnover | 11.18 | 9.44 | 8.51 | 8.66 | 11.78 |
September 30, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,958,900K ÷ $175,200K
= 11.18
The payables turnover ratio measures how efficiently a company manages its accounts payable by comparing the cost of goods sold to the average accounts payable balance. A higher ratio indicates that the company is paying off its suppliers more frequently.
Hologic, Inc.'s payables turnover has shown a consistent upward trend over the past five years, increasing from 7.58 in 2019 to 8.98 in 2023. This suggests that the company has been managing its accounts payable more efficiently, possibly negotiating better payment terms with suppliers or improving inventory management.
The higher payables turnover ratio indicates that Hologic, Inc. is paying its suppliers more frequently relative to its cost of goods sold. This may reflect strong supplier relationships and effective cash flow management, possibly leading to improved working capital management and potentially lower financing costs.
Overall, Hologic, Inc.'s increasing payables turnover ratio indicates that the company has been effectively managing its accounts payable, which is a positive signal for its financial health and operational efficiency.
Peer comparison
Sep 30, 2023