Raytheon Technologies Corp (RTX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 6,114,000 | 5,731,000 | 5,862,000 | 48,056,000 | 34,598,000 |
| Payables | US$ in thousands | 10,698,000 | 9,896,000 | 8,751,000 | 8,639,000 | 7,816,000 |
| Payables turnover | 0.57 | 0.58 | 0.67 | 5.56 | 4.43 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $6,114,000K ÷ $10,698,000K
= 0.57
RTX Corp's payables turnover has shown a consistent trend over the past five years, with values ranging from 5.28 to 5.93. The payables turnover ratio measures how efficiently the company is managing its accounts payable by paying off its suppliers. A higher ratio indicates that the company is paying its suppliers more frequently within a given period.
The decrease in payables turnover from 2018 (5.93) to 2019 (5.28) suggests that RTX Corp took more time to pay off its suppliers in 2019 compared to the prior year. However, the subsequent increase in 2020 and 2021 indicates an improvement in the efficiency of managing payables.
The slight decrease in payables turnover in 2022 (5.40) and 2023 (5.31) may suggest that RTX Corp has slightly extended its payment period to suppliers. This could potentially impact relationships with suppliers and liquidity management.
Overall, RTX Corp's payables turnover ratio indicates a relatively consistent and efficient management of accounts payable over the years, although there has been a slight fluctuation in recent periods. It is essential for the company to strike a balance between managing payables effectively to maintain good relationships with suppliers and optimizing cash flow for operational needs.
Peer comparison
Dec 31, 2023