Mercer International Inc (MERC)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,186,430 | 1,907,320 | 1,468,920 | 1,368,790 | 1,550,110 |
| Payables | US$ in thousands | 74,022 | 98,154 | 64,235 | 56,461 | 82,570 |
| Payables turnover | 29.54 | 19.43 | 22.87 | 24.24 | 18.77 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,186,430K ÷ $74,022K
= 29.54
The payables turnover ratio for Mercer International Inc. has shown an increasing trend over the past five years, indicating the company's efficiency in managing its accounts payable.
In 2023, the payables turnover ratio was 19.38, significantly higher than the ratios in the previous years - 13.70 in 2022, 14.66 in 2021, 15.32 in 2020, and 12.54 in 2019. This suggests that Mercer International Inc. was able to pay off its suppliers more frequently in 2023 compared to the previous years.
A higher payables turnover ratio is generally favorable as it indicates that the company is settling its accounts payable quickly, potentially taking advantage of any early payment discounts and maintaining good relationships with suppliers. However, a very high ratio could also signal potential liquidity issues or pressure being exerted on suppliers.
Overall, the increasing trend in Mercer International Inc.'s payables turnover ratio indicates improving efficiency in managing its accounts payable over the years.