Perrigo Company PLC (PRGO)

Payables turnover

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Cost of revenue (ttm)	US$ in thousands	2,837,100	2,931,500	2,975,200	3,018,300	3,043,000	3,027,500	2,996,300	2,966,100	2,935,100	2,817,600	2,722,500	2,800,300	2,879,600	3,031,900	3,248,100	3,269,800	3,262,500	3,196,300	3,064,200	2,974,400
Payables	US$ in thousands	471,500	453,700	477,700	433,100	470,500	505,200	537,300	461,400	490,400	479,600	411,200	405,600	402,400	430,300	451,600	536,400	489,100	555,800	520,200	524,900
Payables turnover		6.02	6.46	6.23	6.97	6.47	5.99	5.58	6.43	5.99	5.87	6.62	6.90	7.16	7.05	7.19	6.10	6.67	5.75	5.89	5.67

June 30, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $2,837,100K ÷ $471,500K
= 6.02

Perrigo Company PLC's payables turnover has exhibited fluctuations over the past eight quarters, ranging from a low of 5.58 to a high of 7.16. The average payables turnover ratio over this period is approximately 6.45.

The payables turnover ratio indicates the efficiency with which the company is managing its trade credit obligations. A higher ratio suggests that Perrigo is paying its suppliers more frequently within a shorter period, which can sometimes be favorable as it may signal strong supplier relationships or the ability to negotiate favorable credit terms.

However, it is important to note that an excessively high payables turnover ratio may also suggest that the company is potentially delaying payments to suppliers excessively, which could damage supplier relationships or indicate cash flow issues. Conversely, a low payables turnover ratio may indicate inefficiencies in managing payables or an inability to take advantage of favorable credit terms.

Overall, Perrigo Company PLC's payables turnover ratio has shown some variability but remains within a relatively stable range, reflecting a generally consistent approach to managing its trade credit obligations. It would be important for stakeholders to monitor this ratio over time to ensure that it remains at an appropriate level relative to industry benchmarks and the company's specific circumstances.