Laboratory Corporation of America Holdings (LH)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 9,384,500 | 8,796,700 | 8,155,000 | 10,496,600 | 9,025,700 |
| Payables | US$ in thousands | 875,800 | 827,500 | 852,200 | 621,300 | 638,900 |
| Payables turnover | 10.72 | 10.63 | 9.57 | 16.89 | 14.13 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $9,384,500K ÷ $875,800K
= 10.72
The payables turnover ratio for Laboratory Corporation of America Holdings has shown some fluctuations over the past five years. The data indicates that the company's payables turnover was 14.13 times in December 31, 2020, and increased to 16.89 times by December 31, 2021. However, this trend reversed in the subsequent years, with a decrease to 9.57 times by December 31, 2022. There was a modest improvement in payables turnover to 10.63 times by December 31, 2023, followed by a slight increase to 10.72 times by December 31, 2024.
The payables turnover ratio measures how efficiently a company is managing its trade credit by paying its suppliers. A higher turnover ratio generally indicates that the company is paying its suppliers more frequently, which can be a sign of good liquidity and strong supplier relationships. Conversely, a lower turnover ratio may suggest that the company is taking longer to pay its suppliers, which could potentially strain supplier relations or indicate liquidity issues.
In the case of Laboratory Corporation of America Holdings, the fluctuation in payables turnover ratios suggests some variability in the company's payment practices over the years. It would be important for stakeholders to further investigate the reasons behind these fluctuations to determine the impact on the company's financial health and supplier relationships.
Peer comparison
Dec 31, 2024