Regal Beloit Corporation (RRX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,887,300 | 4,001,100 | 2,894,900 | 2,244,300 | 2,480,100 |
| Payables | US$ in thousands | 549,400 | 497,700 | 643,800 | 360,100 | 337,000 |
| Payables turnover | 8.90 | 8.04 | 4.50 | 6.23 | 7.36 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,887,300K ÷ $549,400K
= 8.90
The payables turnover ratio measures how efficiently a company is managing its accounts payable by comparing its purchases to its average accounts payable balance. A higher payables turnover ratio generally indicates that the company is paying its suppliers more quickly.
Analyzing the payables turnover of Regal Rexnord Corp over the past five years reveals a fluctuating trend. In 2019, the company had a payables turnover ratio of 7.05, which decreased slightly to 5.83 in 2021 before increasing to 7.13 in 2022. However, the ratio saw a significant leap to 7.61 in 2023.
The remarkable increase in the payables turnover ratio from 2022 to 2023 suggests that Regal Rexnord Corp is paying its suppliers at a faster rate, which can have implications for its working capital management and cash flow. It may indicate that the company has negotiated better payment terms with its suppliers or has improved its efficiency in managing accounts payable.
Overall, the upward trend in the payables turnover ratio for Regal Rexnord Corp implies that the company is effectively managing its accounts payable and handling its supplier relationships efficiently. Further analysis of the company's financial statements and industry benchmarks could provide additional insights into the effectiveness of its payables management strategy.
Peer comparison
Dec 31, 2023