Republic Services Inc (RSG)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 10,883,200 | 9,916,600 | 8,147,200 | 7,346,800 | 7,561,300 |
| Payables | US$ in thousands | 1,411,500 | 1,221,800 | 910,000 | 779,000 | 777,900 |
| Payables turnover | 7.71 | 8.12 | 8.95 | 9.43 | 9.72 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $10,883,200K ÷ $1,411,500K
= 7.71
The payables turnover ratio measures how efficiently a company is managing its trade payables by calculating the number of times the company pays off its suppliers within a specific period. A higher payables turnover ratio typically indicates that the company is paying its suppliers more quickly.
Looking at Republic Services, Inc.'s payables turnover over the past five years, we observe a decreasing trend from 8.10 in 2019 to 6.34 in 2023. This decline suggests that the company is taking more time to pay off its suppliers over the years.
A decreasing payables turnover ratio can be attributed to several factors, including changes in the company's payment terms, a shift in supplier relationships, or improvements in working capital management. It may also indicate that Republic Services, Inc. is holding onto cash longer before paying its vendors.
It is essential to further investigate the reasons behind this decreasing trend in payables turnover to determine the impact on Republic Services, Inc.'s cash flow, liquidity, and relationships with suppliers.
Peer comparison
Dec 31, 2023