Lumen Technologies Inc (LUMN)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 34,826,000 | 20,870,000 | 15,517,000 | 22,591,000 | 31,644,000 |
| Payables | US$ in thousands | 1,134,000 | 1,044,000 | 758,000 | 1,134,000 | 1,724,000 |
| Payables turnover | 30.71 | 19.99 | 20.47 | 19.92 | 18.35 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $34,826,000K ÷ $1,134,000K
= 30.71
The payables turnover ratio measures how efficiently a company manages its accounts payable by determining how many times a company pays off its average accounts payable balance during a specific period.
Based on the data provided for Lumen Technologies Inc, the payables turnover ratio has fluctuated over the past five years. In 2023, the payables turnover ratio was 6.30, which indicates that the company paid off its accounts payable balance approximately 6.30 times during the year. This represents a decrease from the previous year's ratio of 8.28 in 2022.
Looking at the trend over the past five years, we see that the payables turnover ratio was highest in 2021 at 11.20, suggesting that the company was managing its accounts payable most efficiently that year. The ratio decreased in 2020 to 7.88 before dropping further to 5.85 in 2019.
The decreasing trend in the payables turnover ratio may indicate that Lumen Technologies Inc is taking longer to pay off its accounts payable over time. This could result from various factors such as changes in payment terms with suppliers, changes in the company's purchasing practices, or an increase in the average accounts payable balance.
It is important for Lumen Technologies Inc to closely monitor its payables turnover ratio to ensure efficient management of its accounts payable and maintain good relationships with its suppliers. Additionally, further analysis and investigation into the underlying reasons for the changes in the payables turnover ratio can provide valuable insights into the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2023