Mettler-Toledo International Inc (MTD)

Payables turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	1,546,778	1,524,320	1,525,175	1,542,667	1,547,023	1,589,214	1,607,481	1,615,633	1,611,667	1,616,228	1,611,168	1,591,889	1,546,377	1,495,212	1,436,831	1,342,087	1,284,146	1,250,875	1,231,936	1,251,061
Payables	US$ in thousands	215,843	202,859	199,462	189,449	210,411	173,970	170,230	176,733	252,538	226,681	267,523	259,352	272,911	219,294	210,811	189,289	175,801	146,646	155,901	168,515
Payables turnover		7.17	7.51	7.65	8.14	7.35	9.13	9.44	9.14	6.38	7.13	6.02	6.14	5.67	6.82	6.82	7.09	7.30	8.53	7.90	7.42

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,546,778K ÷ $215,843K
= 7.17

The payables turnover ratio is a financial metric used to assess how efficiently a company manages its trade payables. It is calculated by dividing the total purchases made during a period by the average accounts payable for the same period.

Analyzing the data provided for Mettler-Toledo International Inc's payables turnover from March 31, 2020, to December 31, 2024, we observe fluctuations in the ratio over time. The payables turnover ratio ranged from a low of 5.67 on December 31, 2021, to a high of 9.44 on June 30, 2023.

A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently within a given period, which can be seen as favorable as it shows efficient management of payables. Conversely, a lower ratio may suggest that the company is taking longer to pay its suppliers, which could impact supplier relationships and potentially signal financial distress.

In the case of Mettler-Toledo International Inc, the payables turnover ratio fluctuated over the period, with some variability in payment efficiency. For instance, the ratio increased from 7.30 on December 31, 2020, to 8.53 on September 30, 2020, indicating an improvement in managing payables. However, the ratio experienced a decline in the subsequent quarters, dropping to 6.82 on June 30, 2021.

Overall, it is important for the company to monitor its payables turnover ratio consistently to ensure a balance between efficiently managing payables while maintaining healthy relationships with suppliers. Further analysis of the payables turnover trend in conjunction with other financial metrics would provide a more comprehensive understanding of Mettler-Toledo International Inc's financial performance and liquidity management.