Sonoco Products Company (SON)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 5,469,820 | 5,962,160 | 4,658,530 | 4,302,740 | 4,443,410 |
| Payables | US$ in thousands | 707,490 | 818,885 | 721,312 | 536,939 | 537,764 |
| Payables turnover | 7.73 | 7.28 | 6.46 | 8.01 | 8.26 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $5,469,820K ÷ $707,490K
= 7.73
The payables turnover ratio for Sonoco Products Co. has fluctuated over the past five years, ranging from 6.28 in 2021 to 8.03 in 2019. The ratio indicates how efficiently the company is managing its accounts payable by measuring how many times in a year the company pays off its suppliers.
A high payables turnover ratio, such as the 8.03 in 2019, suggests that Sonoco is paying off its suppliers relatively quickly, which may indicate strong supplier relationships and good cash flow management. Conversely, a lower ratio, like the 6.28 in 2021, could indicate that the company is taking longer to pay its suppliers, potentially signaling liquidity issues or strained relationships with vendors.
The increasing trend from 2021 to 2019 shows improvements in managing accounts payable effectively. However, the slight decline in 2023 compared to 2022 suggests a potential slowdown in the efficiency of paying suppliers. It would be advisable for Sonoco to closely monitor and manage its payables turnover to maintain healthy working relationships with suppliers and ensure optimal cash flow management.
Peer comparison
Dec 31, 2023