Paychex Inc (PAYX)
Payables turnover
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,540,400 | 1,479,300 | 1,453,000 | 1,356,300 | 1,271,200 |
| Payables | US$ in thousands | 129,800 | 104,300 | 84,700 | 105,700 | 89,000 |
| Payables turnover | 11.87 | 14.18 | 17.15 | 12.83 | 14.28 |
May 31, 2025 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,540,400K ÷ $129,800K
= 11.87
The payables turnover ratio for Paychex Inc. has exhibited fluctuations over the analyzed period from May 31, 2021, to May 31, 2025. Specifically, the ratio decreased from 14.28 in 2021 to 12.83 in 2022, indicating a slight elongation in the company's accounts payable cycle during that period. This suggests that Paychex was taking relatively longer to settle its trade payables in 2022 compared to 2021.
In 2023, the payables turnover ratio increased sharply to 17.15, reflecting an acceleration in settling payables and a shorter accounts payable period, which could indicate improved liquidity or more efficient management of short-term liabilities. However, in the subsequent years, the ratio declined again to 14.18 in 2024 and further to 11.87 in 2025. These declines imply a lengthening of the payment cycle, as Paychex appears to be paying its trade payables more slowly over these periods.
Overall, the trend of the payables turnover ratio suggests varying management strategies or operational considerations influencing the company's payment practices. The spike in 2023 might represent strategic payments or operational adjustments, while the subsequent decrease indicates a possible shift toward longer payment periods, which could affect the company's liquidity or supplier relationships.