Planet Fitness Inc (PLNT)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 190,026 | 177,200 | 258,333 | 193,372 | 194,449 |
| Payables | US$ in thousands | 23,788 | 20,578 | 27,892 | 19,388 | 21,267 |
| Payables turnover | 7.99 | 8.61 | 9.26 | 9.97 | 9.14 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $190,026K ÷ $23,788K
= 7.99
The payables turnover ratio measures how efficiently a company is managing its accounts payable by indicating how many times a company pays off its suppliers during a specific period. A higher payables turnover ratio typically indicates that the company is paying off its suppliers more frequently and efficiently.
Analyzing the payables turnover ratio of Planet Fitness Inc over the past five years reveals fluctuations in their accounts payable management. The payables turnover ratio shows a decreasing trend from 2019 to 2021, indicating that the company took longer to pay off its suppliers during these years. However, in 2022 and 2023, there was an improvement in the payables turnover ratio, suggesting that Planet Fitness Inc became more efficient in managing its accounts payable during these periods.
Overall, the payables turnover ratios of Planet Fitness Inc from 2019 to 2023 indicate variability in the company's accounts payable management efficiency. It is essential for stakeholders to continue monitoring this ratio to ensure that the company maintains an optimal balance between timely payments to suppliers and cash flow management.