MSC Industrial Direct Company Inc (MSM)
Payables turnover
| Sep 2, 2023 | Sep 3, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,615,350 | 2,389,680 | 2,179,360 | 2,074,380 | 1,931,770 |
| Payables | US$ in thousands | 226,299 | 217,378 | 186,330 | 125,775 | 160,110 |
| Payables turnover | 11.56 | 10.99 | 11.70 | 16.49 | 12.07 |
September 2, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,615,350K ÷ $226,299K
= 11.56
The payables turnover ratio measures how efficiently a company manages its accounts payable by comparing the cost of goods sold to the average accounts payable balance. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which can be a positive sign of good financial management. Here's a detailed analysis of MSC Industrial Direct Co., Inc.'s payables turnover ratio based on the provided data:
Sep 2, 2023: The payables turnover ratio for this period is 10.46, indicating that the company is paying its suppliers approximately 10.46 times a year. This value suggests a high turnover of payables, which can be interpreted as efficient management of accounts payable.
Sep 3, 2022: The payables turnover ratio decreased slightly to 9.82 compared to the previous period. Although this decrease is not substantial, it may indicate a slightly lower frequency of payments to suppliers.
Aug 28, 2021: The payables turnover ratio increased to 10.25 in this period, signaling an improvement in the management of accounts payable compared to the previous year.
Aug 29, 2020: The payables turnover ratio experienced a significant increase to 14.70, indicating a substantial improvement in the management of accounts payable. A higher turnover ratio can imply that the company negotiated better payment terms with its suppliers or managed its accounts payable more efficiently.
Aug 31, 2019: The payables turnover ratio for this year was 12.07, indicating a good management of accounts payable, but slightly lower than the ratio in the previous year. This may suggest a slight decrease in the frequency of payments to suppliers.
Overall, the payables turnover ratio for MSC Industrial Direct Co., Inc. fluctuated over the years, but generally remained at a relatively high level, which could indicate efficient management of accounts payable. It's worth noting that a consistently high payables turnover ratio can also imply a strong bargaining position with suppliers or a quick inventory turnover, which are positive indicators for the company's financial health.
Peer comparison
Sep 2, 2023