Plexus Corp (PLXS)

Payables turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	3,803,760	4,021,390	3,639,640	3,198,890	3,244,450
Payables	US$ in thousands	606,378	646,610	805,583	634,969	516,297
Payables turnover		6.27	6.22	4.52	5.04	6.28

September 30, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $3,803,760K ÷ $606,378K
= 6.27

The payables turnover ratio measures how efficiently a company is managing its trade payables by comparing the purchases made on credit to the average trade payables outstanding.

Analyzing Plexus Corp's payables turnover ratio over the five-year period, we observe fluctuations in the efficiency of paying off its trade payables. In 2020, the company had a payables turnover ratio of 6.28, indicating that it was able to pay off its trade payables approximately 6.28 times during the year. However, this ratio decreased to 5.04 in 2021, suggesting that Plexus Corp took longer to pay off its trade payables that year.

Subsequently, there was an increase in the payables turnover ratio to 4.52 in 2022, indicating that the company improved its efficiency in managing trade payables. This trend continued in 2023 and 2024, with ratios of 6.22 and 6.27, respectively, showing that Plexus Corp was able to pay off its trade payables relatively quicker in those years.

Overall, the fluctuations in Plexus Corp's payables turnover ratio suggest varying levels of efficiency in managing its trade payables over the five-year period. A higher payables turnover ratio generally indicates a shorter time taken to pay off trade payables, reflecting better liquidity management practices within the company. Further qualitative analysis would be required to determine the specific factors driving these fluctuations and to assess the implications for Plexus Corp's financial health and operational efficiency.