Post Holdings Inc (POST)
Payables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 5,109,300 | 4,383,700 | 3,552,600 | 3,261,600 | 3,889,000 |
| Payables | US$ in thousands | 368,800 | 452,700 | 384,200 | 367,900 | 395,600 |
| Payables turnover | 13.85 | 9.68 | 9.25 | 8.87 | 9.83 |
September 30, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $5,109,300K ÷ $368,800K
= 13.85
The payables turnover ratio measures how efficiently a company manages its trade credit from suppliers. It indicates the number of times a company pays off its accounts payable during a period. A higher payables turnover ratio generally indicates that the company is paying off its suppliers quickly.
Looking at the data provided for Post Holdings Inc, we can see that the payables turnover ratio has been gradually increasing over the last five years. In 2019, the ratio was 10.79, and it increased to 10.65 in 2020. Subsequently, it further increased to 9.34 in 2021, then to 10.98 in 2022, and finally to 13.90 in 2023.
The increasing trend in Post Holdings Inc's payables turnover ratio suggests that the company has been managing its accounts payable more efficiently over the years. This indicates that the company is paying off its suppliers at a faster rate, which can be interpreted as a positive sign. It may indicate effective cash flow management, good relationships with suppliers, and a strong financial position.
However, it's important to note that a very high payables turnover ratio may also indicate that the company is not taking full advantage of the credit terms offered by its suppliers, potentially straining its liquidity. Therefore, while a higher payables turnover ratio is generally favorable, it should be analyzed in conjunction with other financial metrics to get a comprehensive understanding of the company's financial health.
In conclusion, the increasing trend in Post Holdings Inc's payables turnover ratio reflects improved efficiency in managing trade credit and paying off suppliers, potentially indicating effective cash flow management and financial strength.
Peer comparison
Sep 30, 2023