Merck & Company Inc (MRK)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 29,523,000 | 31,360,000 | 25,611,000 | 29,810,000 | 27,860,000 |
| Payables | US$ in thousands | 3,922,000 | 4,264,000 | 4,609,000 | 4,327,000 | 3,738,000 |
| Payables turnover | 7.53 | 7.35 | 5.56 | 6.89 | 7.45 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $29,523,000K ÷ $3,922,000K
= 7.53
Merck & Co Inc's payables turnover has shown a fluctuating trend over the past five years. The payables turnover ratio indicates how many times a company pays off its accounts payable balance during a period. An increasing trend in payables turnover typically suggests that the company is managing its accounts payable more efficiently.
From 2019 to 2020, there was a decrease in the payables turnover ratio from 3.78 to 3.37, signaling a longer period taken by Merck & Co Inc to pay off its accounts payable. However, this trend reversed in the following years, with the payables turnover ratio increasing to 2.96 in 2021, 4.08 in 2022, and further to 4.11 in 2023.
The increase in the payables turnover ratio from 2020 to 2023 indicates that the company has been able to pay off its accounts payable more frequently in recent years, potentially enhancing its liquidity position and strengthening relationships with suppliers.
Overall, the upward trend in the payables turnover ratio for Merck & Co Inc reflects an improvement in managing payable obligations efficiently over the past five years.
Peer comparison
Dec 31, 2023