McDonald’s Corporation (MCD)

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	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	3,747,900	5,914,800	5,788,000	5,702,900
Payables	US$ in thousands	1,102,900	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	988,200	849,500	796,800	823,600
Payables turnover		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	3.79	6.96	7.26	6.92

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $4,595,100K ÷ $1,102,900K
= 4.17

McDonald's Corp's payables turnover has shown fluctuations over the past few quarters, indicating variability in the company's ability to manage its accounts payable effectively. In Q3 2023, the payables turnover ratio improved to 0.74 from a lower ratio in the previous quarter, suggesting that the company took longer to pay its suppliers. However, in Q2 2023, the ratio decreased to 0.35, indicating that McDonald's paid its suppliers more quickly compared to the previous quarter.

It is worth noting that in Q1 2023, the payables turnover ratio was negative (-0.04), which could be attributed to potential data inaccuracies or anomalies in the financial statements. In contrast, in Q2 2022 and Q1 2022, the company's payables turnover ratios were positive and higher, reflecting a more efficient management of accounts payable.

Overall, the trend in McDonald's payables turnover indicates some inconsistency in the company's ability to manage its payables efficiently, which may warrant further investigation into its supplier relationships and payment policies.