McDonald’s Corporation (MCD)

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	5,176,000	4,718,200	4,737,100	4,712,000	4,595,100	4,492,700	4,390,800	4,356,900	4,362,800	4,434,800	4,425,200	4,378,100	4,245,900	4,241,500	4,082,800	4,006,000	3,982,000	3,823,100	3,876,900	3,814,900
Payables	US$ in thousands	1,029,000	944,000	949,000	936,000	1,103,000	862,400	806,600	811,800	980,200	794,800	739,400	718,600	1,006,800	772,600	730,900	670,000	741,300	689,000	538,400	671,900
Payables turnover		5.03	5.00	4.99	5.03	4.17	5.21	5.44	5.37	4.45	5.58	5.98	6.09	4.22	5.49	5.59	5.98	5.37	5.55	7.20	5.68

December 31, 2024 calculation

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

The payables turnover ratio of McDonald’s Corporation has displayed some fluctuations over the past few years. The ratio, which measures how efficiently the company pays its suppliers, has ranged from a low of 4.17 in December 31, 2023, to a high of 7.20 in June 30, 2020.

A higher payables turnover ratio generally indicates that the company is paying its suppliers more quickly, which could imply strong liquidity or effective management of working capital. On the other hand, a lower ratio suggests that the company is taking longer to pay its trade payables, which could signal potential cash flow issues or strained relationships with suppliers.

Overall, McDonald’s Corporation's payables turnover ratio has remained relatively stable over the period, with minor fluctuations within a range of 4.17 to 7.20. It is important for the company to monitor this ratio closely to ensure an optimal balance between managing cash flow efficiently and maintaining good relationships with suppliers.