Stryker Corporation (SYK)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 8,155,000 | 7,440,000 | 6,871,000 | 6,140,000 | 5,294,000 |
| Payables | US$ in thousands | 1,679,000 | 1,517,000 | 1,413,000 | 1,129,000 | 810,000 |
| Payables turnover | 4.86 | 4.90 | 4.86 | 5.44 | 6.54 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $8,155,000K ÷ $1,679,000K
= 4.86
The payables turnover for Stryker Corporation has exhibited a declining trend over the years. It decreased from 6.54 in December 31, 2020, to 4.86 in both December 31, 2022 and December 31, 2024. This indicates that, on average, the company took 6.54 days to pay its suppliers in 2020, and this figure reduced to 4.86 days by 2024.
The payables turnover ratio provides insight into how efficiently a company manages its accounts payables. A higher turnover ratio suggests that the company is paying its suppliers more quickly, which can be beneficial for maintaining good relationships.
On the contrary, the decreasing trend observed in Stryker's payables turnover may indicate a potential delay in payments to suppliers over the years, which may lead to strained relationships or missed opportunities for early payment discounts. Additionally, a declining payables turnover could also signal inefficiencies in the company's working capital management or liquidity constraints.
It would be advisable for Stryker Corporation to evaluate and improve its payables management processes to ensure timely payments to suppliers while maintaining a balance with its cash flow requirements and overall financial health.
Peer comparison
Dec 31, 2024