Laboratory Corporation of America Holdings (LH)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 8,796,700 | 8,155,000 | 10,496,600 | 9,025,700 | 8,302,300 |
| Payables | US$ in thousands | 827,500 | 852,200 | 621,300 | 638,900 | 632,300 |
| Payables turnover | 10.63 | 9.57 | 16.89 | 14.13 | 13.13 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $8,796,700K ÷ $827,500K
= 10.63
The payables turnover ratio for Laboratory Corp. Of America Holdings has shown a fluctuating trend over the past five years. In 2023, the payables turnover ratio decreased to 10.63 from 11.22 in 2022. This indicates that the company took longer to pay off its suppliers and vendors in 2023 compared to the previous year.
However, when comparing the current ratio to earlier years, we see that in 2023 the payables turnover ratio is lower than in 2021 (16.89) and 2020 (14.13), but still higher than in 2019 (13.13). This suggests that the company has been managing its accounts payables more efficiently in recent years compared to the earlier period, despite the slight decline in 2023.
It is essential for the company to monitor its payables turnover ratio closely, as a declining ratio may indicate potential cash flow issues or strained supplier relationships. Further analysis of the company's payment terms, supplier negotiations, and cash management practices would provide a more in-depth understanding of the factors influencing the payables turnover ratio.
Peer comparison
Dec 31, 2023