Kennametal Inc (KMT)
Payables turnover
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,419,810 | 1,431,740 | 1,364,480 | 1,288,960 | 1,355,830 |
| Payables | US$ in thousands | 191,541 | 203,341 | 227,887 | 177,659 | 164,641 |
| Payables turnover | 7.41 | 7.04 | 5.99 | 7.26 | 8.24 |
June 30, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,419,810K ÷ $191,541K
= 7.41
The payables turnover ratio for Kennametal Inc has shown variability over the past five years. In 2020, the company had a payables turnover of 8.24, indicating that it paid off its accounts payable approximately 8.24 times during the year. Subsequently, there was a slight decrease to 7.26 in 2021 before a further decrease to 5.99 in 2022. However, there was an improvement in 2023 with a payables turnover of 7.04, followed by a continued increase to 7.41 in 2024.
The fluctuation in the payables turnover ratio reflects changes in the company's payment practices and relationships with suppliers. A higher payables turnover ratio generally indicates that the company is paying off its suppliers more quickly, which could be advantageous in terms of managing working capital efficiently. Conversely, a lower payables turnover ratio suggests that the company is taking longer to pay its suppliers, potentially signaling weaker liquidity or negotiating power with suppliers.
Overall, Kennametal Inc's payables turnover ratio has shown some volatility over the years, and further analysis would be needed to assess the implications of these fluctuations on the company's financial health and management of its accounts payable.