McCormick & Company Incorporated (MKC)
Number of days of payables
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Payables turnover | 3.72 | 3.48 | 3.59 | 3.20 | 3.78 | |
| Number of days of payables | days | 98.21 | 104.86 | 101.60 | 114.15 | 96.54 |
November 30, 2023 calculation
Number of days of payables = 365 ÷ Payables turnover
= 365 ÷ 3.72
= 98.21
To analyze McCormick & Co., Inc.'s number of days of payables, we can calculate the average number of days it takes for the company to pay its accounts payable. By taking the average of the number of days of payables over the past five years, we find that it is 103.07 days.
The number of days of payables indicates the average number of days it takes for the company to pay its suppliers or trade payables. A higher number of days of payables may suggest that the company is taking longer to settle its short-term liabilities, potentially indicating a strained liquidity position or a strategy to optimize cash flow.
It is important to compare the trend of this ratio over the years to understand the company's payment patterns. In this case, there has been a slight increase in the number of days of payables from 2019 to 2023, which indicates that the company may be taking longer to settle its payables over time. This could be due to various factors such as changes in payment terms with suppliers or shifts in the company's working capital management strategy.
Overall, the trend in the number of days of payables for McCormick & Co., Inc. highlights the importance of carefully managing the company's payment practices and assessing its impact on liquidity and working capital efficiency.