International Flavors & Fragrances Inc (IFF)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 14,214,000 | 14,345,000 | 11,599,000 | 4,157,110 | 4,126,320 |
| Payables | US$ in thousands | 1,378,000 | 1,418,000 | 1,532,000 | 556,000 | 510,372 |
| Payables turnover | 10.31 | 10.12 | 7.57 | 7.48 | 8.08 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $14,214,000K ÷ $1,378,000K
= 10.31
The payables turnover ratio for International Flavors & Fragrances Inc. has exhibited some fluctuation over the past five years, ranging from a low of 5.17 in 2021 to a high of 5.93 in 2019. The ratio measures how efficiently the company is managing its accounts payable by determining how many times the company pays off its suppliers in a given period.
A higher payables turnover ratio indicates that the company is managing its payables effectively and is able to pay off its suppliers more frequently within a year. On the contrary, a lower ratio could suggest that the company takes longer to pay its suppliers, potentially indicating liquidity issues or deliberate strategies to delay payments.
In the case of International Flavors & Fragrances Inc., the payables turnover ratios have generally remained above 5, indicating a relatively efficient management of accounts payable over the years. The slight fluctuations in the ratio may be due to changes in the company's payment terms, supplier relationships, or operational conditions.
Overall, a consistent and healthy payables turnover ratio is essential for maintaining good relationships with suppliers, managing working capital effectively, and ensuring smooth operations within the company's supply chain.
Peer comparison
Dec 31, 2023