Scotts Miracle-Gro Company (SMG)
Payables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,632,600 | 4,302,400 | 4,272,900 | 3,621,900 | 2,828,500 |
| Payables | US$ in thousands | 271,200 | 422,600 | 609,400 | 391,000 | 214,200 |
| Payables turnover | 13.39 | 10.18 | 7.01 | 9.26 | 13.20 |
September 30, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,632,600K ÷ $271,200K
= 13.39
The payables turnover ratio for Scotts Miracle-Gro Company has fluctuated over the past five years. The ratio measures how efficiently the company manages its trade payables, showing the number of times payables are paid and replaced during a specific period.
In 2023, the payables turnover ratio increased to 9.99, indicating that the company's payables turnover improved significantly compared to the previous year. This may suggest that Scotts Miracle-Gro Company was able to manage its payables more efficiently, either by negotiating better terms with suppliers or by strategically managing its cash flow.
The upward trend in the payables turnover ratio demonstrates potential improvement in the company's working capital management and liquidity. It could also indicate a more effective use of credit extended by suppliers, contributing to potential cost savings and improved cash flow for the company.
However, it is also important to consider the reasons behind these fluctuations, as they could be influenced by changes in the company's payment terms, purchasing strategy, or supplier relationships. A thorough analysis of the company's financial and operational activities would provide more insights into the factors driving these changes in the payables turnover ratio.
Peer comparison
Sep 30, 2023