Lennox International Inc (LII)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,569,400 | 3,434,100 | 3,433,700 | 3,005,700 | 2,594,000 |
| Payables | US$ in thousands | 490,000 | 374,700 | 427,300 | 402,100 | 340,300 |
| Payables turnover | 7.28 | 9.16 | 8.04 | 7.48 | 7.62 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,569,400K ÷ $490,000K
= 7.28
The payables turnover ratio measures how efficiently a company manages its trade payables by evaluating how quickly it pays its suppliers. A higher ratio indicates that the company is paying its suppliers more frequently within a given period.
Based on the data provided, Lennox International Inc's payables turnover has fluctuated over the past five years. The ratio was 7.62 in 2020, 7.48 in 2021, 8.04 in 2022, 9.16 in 2023, and 7.28 in 2024.
The increase in the payables turnover ratio from 2020 to 2023 suggests that Lennox International Inc has been more efficient in paying its suppliers during this period. A higher ratio in 2023 indicates that the company paid its trade payables more frequently compared to previous years, leading to a positive relationship with its suppliers.
However, the decrease in the payables turnover ratio in 2024 to 7.28 may indicate that Lennox International Inc took longer to pay its suppliers during that year. It is essential to investigate the reasons behind this decrease to determine if it was a strategic decision or if there are underlying issues impacting the company's supplier relationships or cash flow management.
In conclusion, while Lennox International Inc's payables turnover ratio has shown some fluctuations, the company has generally demonstrated efficiency in managing its trade payables. Further analysis and context are necessary to fully understand the implications of these fluctuations on the company's financial health and supplier relationships.
Peer comparison
Dec 31, 2024