MillerKnoll Inc (MLKN)
Payables turnover
| Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,941,600 | 3,835,100 | 2,183,700 | 2,470,700 | 2,304,900 |
| Payables | US$ in thousands | 269,500 | 355,100 | 178,400 | 128,800 | 177,700 |
| Payables turnover | 14.63 | 10.80 | 12.24 | 19.18 | 12.97 |
June 3, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,941,600K ÷ $269,500K
= 14.63
The payables turnover ratio measures the efficiency of a company in paying its suppliers and is calculated by dividing the net credit purchases by the average accounts payable. A higher payables turnover indicates that the company is paying its suppliers more frequently or efficiently.
Looking at the payables turnover ratio for MillerKnoll Inc over the past five years, there is a noticeable trend. In Jun 3, 2023, the payables turnover ratio stands at 9.86, reflecting an increase compared to the prior year. This suggests that MillerKnoll has improved its efficiency in paying suppliers, as it now turns over its payables nearly ten times a year.
The ratio then stood at 7.30, 8.50, 12.24, and 9.21 for the years 2022, 2021, 2020, and 2019, respectively. These values also reflect efficient management of payables, with a particularly high turnover in 2020. However, the ratio decreased in 2022 before rebounding in 2023.
The consistent values above 7 indicate that the company is maintaining a relatively high frequency of paying off its suppliers, which can have implications for relationships with vendors and strategic cash flow management.
In conclusion, the increasing payables turnover over the past year demonstrates strong supplier payment efficiency by MillerKnoll Inc, indicating effective management of accounts payable and potentially positive relationships with suppliers.