Parker-Hannifin Corporation (PH)

Payables turnover

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cost of revenue	US$ in thousands	16,695,000	16,490,700	13,348,800	12,421,600	12,346,900
Payables	US$ in thousands	1,991,640	2,050,930	1,731,920	1,667,880	1,111,760
Payables turnover		8.38	8.04	7.71	7.45	11.11

June 30, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $16,695,000K ÷ $1,991,640K
= 8.38

The payables turnover ratio of Parker-Hannifin Corporation has shown a consistent increase over the past five years, indicating that the company is managing its accounts payable more efficiently. The ratio has improved from 7.45 in June 2021 to 8.38 in June 2024. This suggests that the company is taking fewer days to pay its suppliers, which may indicate strong vendor relationships or improved cash management.

The significant increase in payables turnover from 2020 to 2021, where the ratio jumped from 11.11 to 7.45, could be attributed to various factors such as changes in payment terms with suppliers, changes in the company's purchasing strategies, or adjustments in inventory management practices.

Overall, a higher payables turnover ratio is generally considered favorable as it indicates that the company is efficiently managing its accounts payable and effectively utilizing its working capital. However, it is essential to consider industry benchmarks and peer comparisons to gain a more holistic understanding of Parker-Hannifin Corporation's payables turnover performance.