Olin Corporation (OLN)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 6,173,700 | 7,603,800 | 7,046,000 | 6,516,800 | 5,980,700 |
| Payables | US$ in thousands | 775,400 | 837,700 | 847,700 | 729,200 | 651,900 |
| Payables turnover | 7.96 | 9.08 | 8.31 | 8.94 | 9.17 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $6,173,700K ÷ $775,400K
= 7.96
The payables turnover ratio measures how efficiently a company is managing its accounts payable by calculating how many times a company pays off its suppliers in a given period.
Analyzing the payables turnover of Olin Corp. over the past five years, we observe a fluctuating trend. The payables turnover ratio decreased from 8.34 in 2019 to 7.31 in 2023, indicating that the company took longer to pay off its suppliers in 2023 compared to 2019. This could suggest a potential strain on the company's liquidity or changes in its payment terms with suppliers.
Although the ratio decreased from 2022 to 2023, it remained above 7 in all years, indicating that Olin Corp. is generally efficient in managing its accounts payable. A higher payables turnover ratio usually suggests that the company is paying its suppliers more quickly, which can be beneficial in terms of maintaining good supplier relationships and possibly taking advantage of any early payment discounts offered.
Overall, while the decreasing trend in payables turnover raises some concerns, Olin Corp. has generally maintained a satisfactory level of efficiency in managing its payables over the analyzed period. Further investigation into the company's liquidity position and supplier relationships may be warranted to fully understand the implications of the fluctuating payables turnover ratio.
Peer comparison
Dec 31, 2023