Novanta Inc (NOVT)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 708,151 | 698,874 | 598,934 | 499,762 | 539,875 |
| Payables | US$ in thousands | 57,195 | 75,225 | 68,514 | 42,966 | 52,585 |
| Payables turnover | 12.38 | 9.29 | 8.74 | 11.63 | 10.27 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $708,151K ÷ $57,195K
= 12.38
Novanta Inc's payables turnover ratio has shown fluctuations over the past five years. The payables turnover ratio indicates how efficiently a company is managing its payments to suppliers. A higher payables turnover ratio typically suggests that the company is paying its suppliers more quickly.
In 2023, Novanta Inc's payables turnover ratio increased to 8.42, reflecting an improvement in the company's efficiency in managing its accounts payable compared to the previous year. This higher ratio could be attributed to better negotiation with suppliers, streamlined payment processes, or a reduction in the company's average accounts payable balance.
In 2022, there was a decrease in the payables turnover ratio to 6.41 from the previous year, indicating that Novanta Inc took longer to pay its suppliers compared to 2021. However, the ratio was still higher than in 2020, suggesting that the company was more efficient in managing its payables during 2022.
Looking back further, in 2021, Novanta Inc's payables turnover ratio was 5.93, which was higher than in 2020 but lower than in 2019. This indicates that the company improved its accounts payable management in 2021 compared to the previous year but still had room for enhancement.
In 2020, the payables turnover ratio was relatively high at 8.06, indicating that Novanta Inc was efficient in managing its payables during that year. This ratio was higher than in the two preceding years, further highlighting the company's strong control over its accounts payable.
Lastly, in 2019, the payables turnover ratio stood at 6.92, showing that Novanta Inc was paying its suppliers in a timely manner, although not as efficiently as in 2020.
Overall, Novanta Inc has shown some variability in its payables turnover ratio over the years, but the trend generally indicates improvement in managing its accounts payable, particularly in recent years. It is important for the company to continue monitoring and optimizing its payables turnover ratio to ensure effective cash flow management and maintain good relationships with its suppliers.
Peer comparison
Dec 31, 2023