Stanley Black & Decker Inc (SWK)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 16,389,900 | 12,663,300 | 10,189,100 | 8,344,600 | 8,107,400 |
| Payables | US$ in thousands | 2,298,900 | 2,344,400 | 3,423,600 | 2,320,000 | 2,087,800 |
| Payables turnover | 7.13 | 5.40 | 2.98 | 3.60 | 3.88 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $16,389,900K ÷ $2,298,900K
= 7.13
Stanley Black & Decker Inc's payables turnover has exhibited fluctuating trends over the past five years. The payables turnover ratio measures how efficiently a company is managing its accounts payable by comparing the cost of goods sold to average accounts payable. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently, which can signify efficient management of its working capital.
From 2019 to 2020, there was a decrease in the payables turnover ratio from 3.88 to 3.60, suggesting that Stanley Black & Decker Inc took longer to settle its payables in 2020 compared to the previous year. However, in 2021, there was a significant improvement in the payables turnover ratio, rising to 2.98, indicating that the company was paying its suppliers more promptly that year.
The most notable improvement in efficiency occurred in 2022, with the payables turnover ratio increasing to 5.40, reflecting a more effective management of accounts payable compared to previous years. This positive trend continued in 2023, with the payables turnover ratio further increasing to 7.13, indicating that Stanley Black & Decker Inc was managing its payables even more efficiently.
Overall, the increasing trend in the payables turnover ratio from 2020 to 2023 suggests that Stanley Black & Decker Inc was improving its working capital management by paying its suppliers in a more timely manner, potentially benefiting from better negotiation power or favorable credit terms. An increasing payables turnover ratio can indicate effective cash flow management and strong relationships with suppliers, contributing positively to the company's financial health.
Peer comparison
Dec 31, 2023