AT&T Inc (T)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	56,543,000	80,816,000	73,720,000	90,085,000	81,981,000
Payables	US$ in thousands	27,309,000	31,101,000	29,511,000	31,836,000	29,640,000
Payables turnover		2.07	2.60	2.50	2.83	2.77

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $56,543,000K ÷ $27,309,000K
= 2.07

The payables turnover ratio measures how effectively a company manages its trade credit by paying off its suppliers. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently within a given period.

Analyzing the payables turnover ratio of AT&T, Inc. over the past five years, we observe fluctuations in the efficiency of the company's payables management.

In 2023, the payables turnover ratio was 1.84, showing an improvement compared to the previous year. This suggests that AT&T paid its suppliers more frequently in 2023, possibly indicating better liquidity or enhanced management of trade credit.

In 2022, the payables turnover ratio decreased to 1.63, which may imply a slight extension in the company's payment period to suppliers compared to the prior year. This could result from various reasons like cash flow constraints or renegotiated payment terms.

The ratio rebounded in 2021 to 2.59, indicating that AT&T effectively managed its payables that year. This could reflect efficient working capital management and timely payments to suppliers.

Similarly, in 2020, the payables turnover ratio was 2.51, remaining relatively stable compared to the previous year. This consistency suggests AT&T's ability to maintain its payables management practices.

Lastly, in 2019, the payables turnover ratio stood at 2.84, the highest among the five years. This signifies that AT&T was efficient in settling its trade payables promptly, enhancing its relationship with suppliers.

In conclusion, fluctuations in AT&T's payables turnover ratio over the years indicate varying levels of efficiency in managing supplier payments. It is essential for the company to strike a balance between maintaining good relationships with suppliers and optimizing its working capital through effective payables management strategies.