Masimo Corporation (MASI)

Payables turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	2,149,400	1,707,200	1,688,300	1,656,400	1,718,500	1,775,900	1,806,600	1,960,700	1,569,441	1,218,223	870,337	428,255	430,882	426,328	421,700	418,851	400,679	373,138	346,695	312,639
Payables	US$ in thousands	252,800	280,800	216,000	203,100	251,500	283,500	265,500	249,100	276,800	267,800	244,500	87,453	75,600	60,710	66,248	62,883	64,061	89,533	89,550	49,110
Payables turnover		8.50	6.08	7.82	8.16	6.83	6.26	6.80	7.87	5.67	4.55	3.56	4.90	5.70	7.02	6.37	6.66	6.25	4.17	3.87	6.37

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $2,149,400K ÷ $252,800K
= 8.50

The payables turnover ratio measures how efficiently a company pays its suppliers by comparing its average accounts payable to its cost of goods sold. Looking at the historical trend for Masimo Corporation's payables turnover ratio from March 31, 2020, to December 31, 2024, we can observe fluctuations in the ratio over time.

In the initial period, the payables turnover ratio was 6.37 on March 31, 2020, indicating that Masimo was paying its suppliers approximately 6.37 times throughout the year. This ratio decreased to 3.87 by June 30, 2020, which suggests a slowdown in the payment processing efficiency. However, the ratio started to improve and reached 7.02 on September 30, 2021, showing that Masimo was managing its payables more effectively.

Despite some fluctuations in between, the payables turnover ratio generally remained relatively stable over the years, hovering around 6-8 times per year. The peak ratio of 8.50 on December 31, 2024, suggests that Masimo had significantly improved its payables management efficiency by the end of the period.

Overall, the trend in Masimo's payables turnover ratio reflects variations in how promptly the company pays its suppliers, with some periods showing better efficiency compared to others. An increasing ratio indicates a more efficient payment system, while a decreasing ratio may point to potential delays in settling payables.