Standard Motor Products Inc (SMP)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,274,170	1,276,390	1,178,520	1,027,870	1,051,410
Payables	US$ in thousands	107,455	89,247	137,167	100,018	92,535
Payables turnover		11.86	14.30	8.59	10.28	11.36

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,274,170K ÷ $107,455K
= 11.86

Standard Motor Products, Inc.'s payables turnover ratio has exhibited fluctuations over the past five years, ranging from 6.72 to 11.08. This ratio indicates the company's efficiency in managing its trade payables. A higher payables turnover ratio generally suggests that the company is taking longer to pay its suppliers, which may indicate effective cash flow management or bargaining power with suppliers. Conversely, a lower ratio could signify a longer payment period or potential liquidity issues.

In 2023, the payables turnover ratio decreased to 9.02 from 11.08 in 2022, indicating that the company took slightly longer to pay its suppliers. However, the ratio remained relatively high compared to prior years, suggesting continued efficiency in managing payables. It is important to further investigate the reasons behind this change, such as changes in payment terms or vendor relationships, to assess the implications for the company's financial health and supplier management strategies.