Netflix Inc (NFLX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 19,715,400 | 19,168,300 | 17,332,700 | 15,276,300 | 12,440,200 |
| Payables | US$ in thousands | 747,412 | 671,513 | 837,483 | 656,183 | 674,347 |
| Payables turnover | 26.38 | 28.54 | 20.70 | 23.28 | 18.45 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $19,715,400K ÷ $747,412K
= 26.38
The payables turnover ratio measures how efficiently a company is managing its accounts payable. A higher ratio indicates that the company is paying its suppliers more frequently, which can be a sign of strong liquidity and effective working capital management.
Netflix Inc.'s payables turnover has exhibited fluctuation over the past five years. The ratio increased from 18.45 in 2019 to 28.54 in 2022, indicating that the company was paying its suppliers more frequently. However, there was a decrease to 26.38 in 2023. This suggests that Netflix may have slightly extended its payment period to suppliers during that year, which could be a deliberate strategy to improve cash flow or negotiate more favorable payment terms.
Overall, the payables turnover ratios for Netflix Inc. indicate that the company efficiently manages its accounts payable, with fluctuations possibly reflecting strategic adjustments in its working capital management.