Illumina Inc (ILMN)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,760,000 | 1,612,000 | 1,372,000 | 1,036,000 | 1,076,000 |
| Payables | US$ in thousands | 245,000 | 293,000 | 332,000 | 192,000 | 149,000 |
| Payables turnover | 7.18 | 5.50 | 4.13 | 5.40 | 7.22 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,760,000K ÷ $245,000K
= 7.18
The payables turnover ratio for Illumina Inc has shown a fluctuating trend over the past five years. The ratio has steadily increased from 3.92 in January 2, 2022, to 6.40 in December 31, 2023, indicating that the company is managing its accounts payable more efficiently.
A higher payables turnover ratio suggests that Illumina Inc is paying off its suppliers more frequently during the year, which can be beneficial in terms of building strong supplier relationships and potentially negotiating better terms in the future.
However, it is important to note that while a higher payables turnover ratio can be positive, it could also indicate that Illumina Inc is not taking full advantage of any credit terms offered by its suppliers. Therefore, it is crucial for the company to strike a balance between efficient payables management and maximizing available credit terms to optimize its cash flow and working capital management.
Peer comparison
Dec 31, 2023