Steel Dynamics Inc (STLD)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	15,372,100	16,142,900	13,046,400	8,166,750	8,934,010
Payables	US$ in thousands	—	1,007,300	1,266,830	760,536	509,687
Payables turnover		—	16.03	10.30	10.74	17.53

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $15,372,100K ÷ $—K
= —

The payables turnover ratio measures how efficiently a company manages its accounts payable by evaluating how many times a company pays off its average accounts payable balance during a specific period. A higher payables turnover ratio generally indicates that the company is paying its suppliers more quickly.

Analyzing Steel Dynamics Inc.'s payables turnover ratio over the past five years reveals fluctuations in their accounts payable management efficiency. In 2023, the payables turnover ratio decreased to 13.55 from 15.87 in 2022, indicating that the company took longer to pay off its suppliers' invoices compared to the previous year. This could be a result of changes in the company's supplier relationships or payment terms.

Additionally, looking at the trend over the five-year period, the payables turnover ratio has shown variability. In 2019, the company had a high payables turnover ratio of 17.40, which suggests that Steel Dynamics Inc. was efficient in paying off its suppliers. This efficiency decreased in the following years, with ratios dropping below 15 in 2022 and 2023.

It is important for stakeholders to further investigate the reasons behind the fluctuations in the payables turnover ratio to assess whether the changes are indicative of a strategic shift, operational challenges, or other factors impacting the company's financial management practices.