Sempra Energy (SRE)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,123,000 | 2,856,000 | 2,642,000 | 2,395,000 | 2,254,000 |
| Payables | US$ in thousands | 2,435,000 | 2,269,000 | 1,849,000 | 1,513,000 | 1,413,000 |
| Payables turnover | 1.28 | 1.26 | 1.43 | 1.58 | 1.60 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $3,123,000K ÷ $2,435,000K
= 1.28
The payables turnover ratio measures how efficiently a company is managing its accounts payable by evaluating how many times a company pays off its suppliers during a specific period. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which could be a sign of good liquidity and strong supplier relationships.
Analyzing Sempra's payables turnover over the past five years, we observe fluctuations in the ratio. The payables turnover ratio decreased from 1.89 in 2019 to 1.58 in 2020, which could suggest a decrease in the frequency of payments to suppliers during that period. However, there was an increase in the ratio to 1.74 in 2021, indicating that Sempra improved its payables turnover efficiency.
Furthermore, in 2022 and 2023, Sempra's payables turnover continued to improve, reaching 1.98 and 1.91, respectively. This upward trend suggests that Sempra has been managing its accounts payable more effectively and paying off its suppliers at a faster rate in recent years.
Overall, the increasing trend in Sempra's payables turnover ratio indicates improved efficiency in managing its payables, which can positively impact the company's working capital management and supplier relationships.
Peer comparison
Dec 31, 2023