Innospec Inc (IOSP)
Payables turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 1,759,700 | 1,765,200 | 1,807,400 | 1,783,000 | 1,744,300 | 1,660,500 | 1,542,100 | 1,439,800 | 1,324,200 | 1,237,700 | 1,143,900 | 1,125,200 | 1,147,400 | 1,204,000 | 1,293,500 | 1,331,600 | 1,351,700 | 1,356,800 | 1,355,100 | 1,354,800 |
| Payables | US$ in thousands | 163,600 | 146,100 | 157,900 | 177,700 | 165,300 | 173,600 | 180,900 | 161,800 | 148,700 | 137,100 | 123,500 | 114,500 | 98,700 | 81,800 | 74,100 | 108,400 | 122,000 | 106,100 | 117,100 | 123,900 |
| Payables turnover | 10.76 | 12.08 | 11.45 | 10.03 | 10.55 | 9.57 | 8.52 | 8.90 | 8.91 | 9.03 | 9.26 | 9.83 | 11.63 | 14.72 | 17.46 | 12.28 | 11.08 | 12.79 | 11.57 | 10.93 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,759,700K ÷ $163,600K
= 10.76
Innospec Inc's payables turnover has been relatively stable over the past eight quarters, ranging between 6.77 and 9.43. The payables turnover ratio measures how efficiently a company is managing its trade payables by comparing the cost of goods sold to its average trade payables during a specific period.
The higher the payables turnover ratio, the shorter the time it takes for the company to pay its suppliers, indicating efficient management of payables. Innospec's payables turnover has been on the higher end of the spectrum, indicating that the company is effectively managing its trade payables.
However, it is important to note that a very high payables turnover ratio may also indicate that a company is taking advantage of longer payment terms from suppliers, potentially straining supplier relationships. Therefore, it is essential to consider the industry norm and overall working capital management practices when analyzing the payables turnover ratio.
Peer comparison
Dec 31, 2023