Sensient Technologies Corporation (SXT)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	1,368,050	1,306,830	1,242,290	300,671	286,546
Payables	US$ in thousands	139,052	131,114	142,365	125,519	107,324
Payables turnover		9.84	9.97	8.73	2.40	2.67

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,368,050K ÷ $139,052K
= 9.84

The payables turnover ratio for Sensient Technologies Corporation has exhibited a fluctuating trend over the past five years. In 2020, the payables turnover was 2.67, indicating that the company took approximately 2.67 times to pay off its accounts payable during that period.

However, there was a slight decrease in the payables turnover ratio in 2021, with a value of 2.40. This could suggest a relatively longer payment period for the company's accounts payable compared to the previous year.

A significant improvement was seen in 2022, with the payables turnover ratio jumping to 8.73. The substantial increase in this ratio indicates that Sensient Technologies Corporation significantly accelerated its payments to suppliers, potentially enhancing relationships with vendors and optimizing cash flow management.

This positive trend continued in 2023 and 2024, with the payables turnover ratios reaching 9.97 and 9.84, respectively. These high values suggest that the company efficiently managed its accounts payable by paying them off quickly relative to its purchases, reflecting strong liquidity and effective working capital management.

Overall, the increasing trend in payables turnover ratios from 2020 to 2024 indicates an improvement in Sensient Technologies Corporation's ability to efficiently manage and pay off its accounts payable, leading to enhanced vendor relationships and potential working capital benefits.