KBR Inc (KBR)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 6,608,000 | 6,295,000 | 7,084,000 | 5,101,000 | 4,986,000 |
| Payables | US$ in thousands | 593,000 | 637,000 | 1,026,000 | 574,000 | 572,000 |
| Payables turnover | 11.14 | 9.88 | 6.90 | 8.89 | 8.72 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $6,608,000K ÷ $593,000K
= 11.14
The payables turnover ratio measures how efficiently a company manages its accounts payable by comparing the cost of goods sold to the average accounts payable balance. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which can signify good liquidity and strong vendor relationships.
Analyzing the payables turnover ratio of KBR Inc from 2019 to 2023, we observe an increasing trend over the years. In 2019, the payables turnover was 8.72, and it gradually increased to 11.14 in 2023. This trend suggests that KBR Inc has been managing its accounts payable more efficiently, possibly negotiating better payment terms with suppliers or streamlining its payment processes.
The improvement in the payables turnover ratio indicates that KBR Inc is taking longer to pay its suppliers, which can positively impact working capital management and cash flow. However, a very high payables turnover ratio could also indicate potential issues such as strained supplier relationships or difficulties in securing credit terms.
Overall, the increasing trend in KBR Inc's payables turnover ratio reflects a positive development in the company's financial efficiency and management of accounts payable.
Peer comparison
Dec 31, 2023