McDonald’s Corporation (MCD)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	5,176,000	4,775,100	4,362,800	4,245,900	3,996,400
Payables	US$ in thousands	1,029,000	1,103,000	980,200	1,006,800	741,300
Payables turnover		5.03	4.33	4.45	4.22	5.39

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $5,176,000K ÷ $1,029,000K
= 5.03

The payables turnover ratio for McDonald’s Corporation has shown a consistent pattern over the years, indicating the company's ability to effectively manage its accounts payable. The ratio decreased from 5.39 in December 31, 2020, to 4.22 in December 31, 2021, suggesting a decrease in the frequency of paying off its suppliers. However, there was a slight improvement in the ratio in the following years, reaching 4.45 in December 31, 2022, and 4.33 in December 31, 2023. The payables turnover ratio then increased to 5.03 by December 31, 2024, indicating McDonald’s Corporation was able to enhance its efficiency in paying its vendors. Overall, the trend in the payables turnover ratio reflects McDonald’s Corporation's ability to effectively manage and settle its accounts payable obligations over the years.