Illinois Tool Works Inc (ITW)

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	9,445,000	9,433,000	9,485,000	9,533,000	9,549,000	9,414,000	9,139,000	8,910,000	8,592,000	8,298,000	8,112,000	7,543,000	7,375,000	7,397,000	7,494,000	7,999,000	8,187,000	8,261,000	8,350,000	8,482,000
Payables	US$ in thousands	581,000	580,000	590,000	599,000	594,000	618,000	679,000	696,000	585,000	565,000	607,000	589,000	534,000	521,000	402,000	488,000	472,000	493,000	512,000	568,000
Payables turnover		16.26	16.26	16.08	15.91	16.08	15.23	13.46	12.80	14.69	14.69	13.36	12.81	13.81	14.20	18.64	16.39	17.35	16.76	16.31	14.93

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $9,445,000K ÷ $581,000K
= 16.26

The payables turnover ratio for Illinois Tool Works, Inc. has been relatively stable over the past eight quarters, ranging from 12.65 to 16.06. This indicates that the company is efficient in managing its accounts payable by paying off its suppliers in a timely manner.

A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which could indicate strong liquidity and good relationships with suppliers. On the other hand, a lower ratio may indicate that the company is taking longer to pay its bills, potentially signaling cash flow issues or strained relationships with suppliers.

Overall, the consistent payables turnover ratio for Illinois Tool Works, Inc. suggests that the company has a well-managed accounts payable process, which allows it to maintain good relationships with suppliers while also efficiently utilizing its working capital.