Sonoco Products Company (SON)
Payables turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 5,991,590 | 6,064,360 | 6,220,010 | 6,414,470 | 6,724,260 | 7,029,300 | 6,619,330 | 6,141,420 | 5,725,150 | 5,175,920 | 5,069,520 | 4,940,690 | 4,885,720 | 3,554,518 | 3,584,978 | 3,682,968 | 3,729,118 | 3,711,260 | 3,737,600 | 2,508,197 |
| Payables | US$ in thousands | 707,490 | 695,550 | 689,211 | 746,118 | 818,885 | 888,394 | 938,934 | 872,340 | 721,312 | 686,113 | 641,003 | 565,785 | 536,939 | 506,170 | 554,090 | 538,348 | 537,764 | 544,804 | 554,431 | 571,370 |
| Payables turnover | 8.47 | 8.72 | 9.02 | 8.60 | 8.21 | 7.91 | 7.05 | 7.04 | 7.94 | 7.54 | 7.91 | 8.73 | 9.10 | 7.02 | 6.47 | 6.84 | 6.93 | 6.81 | 6.74 | 4.39 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $5,991,590K ÷ $707,490K
= 8.47
The payables turnover ratio for Sonoco Products Co. has been relatively stable over the past eight quarters, ranging from 5.56 to 8.11. This ratio indicates how efficiently the company manages its accounts payable by measuring how many times a company pays off its average accounts payable balance during a specific period.
A higher payables turnover ratio suggests that the company is paying off its suppliers more frequently, which could indicate strong liquidity management but may also imply a lack of ability to take advantage of trade credit terms. Conversely, a lower ratio could indicate that the company is taking longer to pay its suppliers, potentially benefiting from extended payment terms but risking strain on supplier relationships.
In the case of Sonoco Products Co., the gradual increase in the payables turnover ratio from Q1 2022 to Q2 2023 indicates improvement in the efficiency of managing accounts payable. This trend suggests that the company may be paying off its suppliers more quickly, possibly improving liquidity. However, a payables turnover ratio should be analyzed in conjunction with other financial ratios and factors to provide a comprehensive assessment of the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2023