Sonos Inc (SONO)
Payables turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,384,030 | 1,408,630 | 1,335,250 | 1,179,350 | 1,083,950 |
| Payables | US$ in thousands | 187,981 | 335,758 | 214,996 | 250,328 | 251,941 |
| Payables turnover | 7.36 | 4.20 | 6.21 | 4.71 | 4.30 |
September 30, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,384,030K ÷ $187,981K
= 7.36
The payables turnover ratio measures how efficiently a company is managing its accounts payable. It indicates the number of times a company pays off its average accounts payable balance during a period. A higher payables turnover ratio generally suggests that the company is managing its payables effectively.
Looking at Sonos Inc's payables turnover ratio over the last five years, we can observe a positive trend. The ratio has consistently increased from 2.91 in September 2019 to 4.99 in September 2023. This indicates that Sonos Inc has been improving its ability to pay off its accounts payable more frequently over the years.
A higher payables turnover ratio could signify that Sonos Inc is efficiently managing its cash flow and working capital, potentially negotiating more favorable payment terms with suppliers, or experiencing improved inventory management. However, it's important to note that exceptionally high ratios may also signal that the company is overly aggressive in settling its payables, potentially harming supplier relationships.
Overall, the increasing trend in Sonos Inc's payables turnover ratio suggests positive changes in its payables management over the years, but further analysis of the company's working capital and supplier relationships would provide a more comprehensive understanding of its financial efficiency.
Peer comparison
Sep 30, 2023