Ingersoll Rand Inc (IR)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,993,900 | 3,590,700 | 3,163,900 | 2,568,300 | 1,239,200 |
| Payables | US$ in thousands | 801,200 | 778,700 | 670,500 | 536,400 | 322,900 |
| Payables turnover | 4.98 | 4.61 | 4.72 | 4.79 | 3.84 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,993,900K ÷ $801,200K
= 4.98
The payables turnover ratio for Ingersoll-Rand Inc has shown a fluctuating trend over the past five years. In 2019, the payables turnover ratio was 4.77, which increased slightly to 4.91 in 2020 before decreasing to 4.72 in 2021. However, there was a noticeable improvement in 2022 with a ratio of 4.61. The latest available data for 2023 indicates a further increase to 4.98.
A high payables turnover ratio generally suggests that the company is efficiently managing its accounts payable by paying suppliers quickly. This can sometimes indicate good relationships with suppliers or effective cash flow management. However, a very high ratio could also imply that the company is missing out on potential opportunities to benefit from trade credit terms.
Overall, the upward trend in Ingersoll-Rand Inc's payables turnover ratio over the past few years indicates a positive trajectory in managing its payables efficiently. It would be beneficial to continue monitoring this ratio to ensure that the company maintains a balance between timely payments to suppliers and maximizing available cash flow.
Peer comparison
Dec 31, 2023