Landstar System Inc (LSTR)

Payables turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	1,529,951	1,536,774	1,541,446	1,549,499	404,567	409,991	411,500	394,574	376,350	346,157	317,048	301,068	303,843	302,866	303,736	297,952	283,740	285,283	288,739	301,428
Payables	US$ in thousands	395,980	464,720	478,688	490,304	527,372	644,054	670,534	626,337	604,130	548,385	481,711	414,440	380,505	339,798	273,324	272,175	271,996	285,442	285,569	273,181
Payables turnover		3.86	3.31	3.22	3.16	0.77	0.64	0.61	0.63	0.62	0.63	0.66	0.73	0.80	0.89	1.11	1.09	1.04	1.00	1.01	1.10

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,529,951K ÷ $395,980K
= 3.86

The payables turnover ratio measures how efficiently a company is managing its trade credit from suppliers. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which could suggest strong liquidity or better negotiation terms. Conversely, a lower ratio may indicate inefficiencies or a reliance on longer credit terms.

Looking at the historical data of Landstar System Inc's payables turnover ratio, we observe fluctuations over the periods. From December 2019 to March 2020, there was a slight increase in the ratio, indicating a more frequent payment of trade payables. However, the ratio dropped in December 2020 and remained relatively stable until March 2021.

From June 2021 to September 2022, there was a consistent increase in the payables turnover ratio, indicating that Landstar System Inc was managing its payables more efficiently during this period. This improvement could be attributed to various factors such as better cash flow management or negotiating favorable payment terms with suppliers.

However, in the most recent data available, there was a significant increase in the payables turnover ratio, reaching its highest point in December 2023. This could suggest that Landstar System Inc has accelerated its payments to suppliers, which may have implications for its working capital management or supplier relationships.

In conclusion, the analysis of Landstar System Inc's payables turnover ratio indicates some fluctuations over time, with recent data showing a notable increase in efficiency in managing trade payables. Further examination of the company's financial health and operational strategies would be needed to fully understand the implications of these changes on its overall performance.