Pfizer Inc (PFE)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	49,592,000	52,423,000	45,545,000	22,352,000	28,160,000
Payables	US$ in thousands	6,710,000	6,809,000	5,578,000	4,283,000	3,887,000
Payables turnover		7.39	7.70	8.17	5.22	7.24

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $49,592,000K ÷ $6,710,000K
= 7.39

The payables turnover ratio measures how efficiently a company manages its accounts payable by showing how many times a company pays off its suppliers during a specific period. A higher payables turnover ratio indicates that the company is settling its payables more frequently.

Analyzing Pfizer Inc.'s payables turnover over the past five years, we observe fluctuations in the ratio. In 2023, the payables turnover ratio decreased to 3.72 from 5.04 in 2022. This suggests that Pfizer took longer to pay off its suppliers in 2023 compared to the previous year, indicating a decrease in the efficiency of managing its accounts payable.

However, when we look at the trend over the longer term, we see that Pfizer had relatively high payables turnover in 2021 and 2022 (5.53 and 5.04, respectively), indicating efficient management of payables during those years. In contrast, the ratios for 2020 and 2019 were lower, indicating a slower turnover of payables during those periods.

Overall, although there was a decline in the payables turnover ratio in 2023, it is important to consider the broader trend over multiple years to assess Pfizer's performance in managing its payables effectively. This analysis could help in understanding the company's payment practices and relationships with its suppliers in the context of its financial management strategy.