Martin Marietta Materials Inc (MLM)

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	5,343,400	5,310,500	5,303,100	5,251,700	5,269,300	5,302,400	5,092,400	4,856,300	4,571,800	4,204,900	3,984,500	3,861,800	3,867,900	3,838,780	3,929,020	3,962,886	3,942,570	3,874,118	3,770,664	3,744,680
Payables	US$ in thousands	343,300	342,200	346,900	302,600	385,000	333,500	359,700	383,800	356,200	249,300	243,600	200,000	207,800	210,700	197,200	202,000	229,600	238,559	199,181	184,844
Payables turnover		15.56	15.52	15.29	17.36	13.69	15.90	14.16	12.65	12.83	16.87	16.36	19.31	18.61	18.22	19.92	19.62	17.17	16.24	18.93	20.26

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $5,343,400K ÷ $343,300K
= 15.56

The payables turnover ratio measures how efficiently a company is managing its accounts payable by comparing the cost of goods sold to its average accounts payable balance. A higher payables turnover indicates that the company is paying its suppliers more frequently, which can be beneficial in terms of managing working capital.

In the case of Martin Marietta Materials, Inc., we observe fluctuations in the payables turnover ratio over the quarters provided. The ratio ranged from 11.29 to 15.58 during the past year. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which could indicate strong relationships with suppliers or efficient cash management practices.

In Q1 2023, the payables turnover ratio was 15.58, which was the highest among the data provided. This suggests that the company was paying its suppliers at a faster rate compared to the previous quarters. However, in subsequent quarters, the ratio decreased slightly, with Q2 2023 showing the lowest ratio at 13.72.

Overall, Martin Marietta Materials, Inc. has maintained a relatively stable payables turnover ratio, hovering around 13 to 14, indicating efficient management of accounts payable. It is essential to continue monitoring this ratio to ensure that the company maintains healthy relationships with its suppliers and effectively utilizes its working capital.