Stryker Corporation (SYK)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 7,440,000 | 6,871,000 | 6,140,000 | 5,294,000 | 5,188,000 |
| Payables | US$ in thousands | 1,517,000 | 1,413,000 | 1,129,000 | 810,000 | 675,000 |
| Payables turnover | 4.90 | 4.86 | 5.44 | 6.54 | 7.69 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $7,440,000K ÷ $1,517,000K
= 4.90
The payables turnover ratio measures how efficiently a company manages its accounts payables by indicating how many times during a period the company pays off its suppliers. In the case of Stryker Corp., the payables turnover ratios over the past five years have shown a decreasing trend, declining from 7.69 in 2019 to 4.90 in 2023.
A decreasing payables turnover ratio may suggest that Stryker Corp. is taking longer to pay its suppliers compared to previous years. This could indicate either a weakening ability to meet its payment obligations promptly or a change in payment terms negotiated with suppliers.
A lower payables turnover ratio could result from a variety of factors, such as changes in company policies regarding payment terms, increased reliance on trade credit from suppliers, or a slowdown in inventory turnover that impacts the purchasing cycle.
It is important to keep in mind that this ratio should be analyzed in conjunction with other financial metrics to get a comprehensive understanding of Stryker Corp.'s financial performance and liquidity position.
Peer comparison
Dec 31, 2023