ON Semiconductor Corporation (ON)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	3,866,200	4,369,500	4,249,000	4,025,500	3,539,200
Payables	US$ in thousands	574,500	725,600	852,100	635,100	572,900
Payables turnover		6.73	6.02	4.99	6.34	6.18

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $3,866,200K ÷ $574,500K
= 6.73

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.

For ON Semiconductor Corporation, the payables turnover has shown some fluctuations over the past five years. In 2020, the payables turnover was 6.18, indicating that the company converted its accounts payable into purchases approximately 6.18 times during the year.

The ratio increased slightly to 6.34 in 2021, suggesting an improvement in the management of payables. However, in 2022, the payables turnover decreased to 4.99, signaling a potential delay in paying off its creditors.

The following year, in 2023, the payables turnover improved to 6.02, indicating a better efficiency in managing its payables. By the end of 2024, the ratio reached 6.73, reflecting a further increase in the frequency of converting accounts payable into purchases.

Overall, while there have been fluctuations in ON Semiconductor Corporation's payables turnover ratio, the general trend shows a focus on efficiently managing its accounts payable over the past five years.