Silicon Laboratories Inc (SLAB)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	321,672	381,549	295,468	216,083	193,571
Payables	US$ in thousands	57,498	89,860	47,327	54,949	38,899
Payables turnover		5.59	4.25	6.24	3.93	4.98

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $321,672K ÷ $57,498K
= 5.59

The payables turnover ratio measures how efficiently a company manages its accounts payable by indicating how many times a company pays off its suppliers during a specific period. A higher payables turnover ratio generally indicates that the company is paying its suppliers more frequently.

In the case of Silicon Laboratories Inc, the payables turnover ratio has fluctuated over the past five years. In 2023, the payables turnover ratio was 5.59, showing an increase from the previous year's ratio of 4.25. This suggests that in 2023, Silicon Laboratories Inc paid off its suppliers 5.59 times during the year, indicating an improvement in managing its accounts payable compared to 2022.

Furthermore, comparing the payables turnover ratio to previous years, we observe a significant increase from 2020 to 2021, followed by a slight decrease in 2022 before rising again in 2023. This fluctuation could be due to various factors such as changes in payment terms with suppliers, business expansion, or shifts in purchasing patterns.

Overall, Silicon Laboratories Inc's increasing payables turnover ratio indicates efficient management of its accounts payable and timely payments to suppliers, which can positively impact the company's relationships with suppliers and cash flow management. It is essential for investors and stakeholders to monitor this ratio alongside other financial metrics to assess the company's financial health and operational efficiency.