Timken Company (TKR)
Payables turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 4,112,700 | 3,309,800 | 3,319,200 | 3,233,300 | 3,121,900 | 3,099,800 | 3,008,900 | 2,932,700 | 2,853,800 | 2,845,000 | 2,692,800 | 2,476,700 | 2,404,400 | 2,428,700 | 2,469,200 | 2,630,500 | 2,662,200 | 2,649,800 | 2,621,600 | 2,547,900 |
| Payables | US$ in thousands | 367,200 | 344,200 | 392,200 | 390,500 | 403,900 | 373,400 | 397,200 | 416,100 | 430,000 | 406,200 | 385,100 | 362,600 | 351,400 | 306,700 | 267,300 | 296,000 | 301,700 | 265,200 | 291,600 | 294,300 |
| Payables turnover | 11.20 | 9.62 | 8.46 | 8.28 | 7.73 | 8.30 | 7.58 | 7.05 | 6.64 | 7.00 | 6.99 | 6.83 | 6.84 | 7.92 | 9.24 | 8.89 | 8.82 | 9.99 | 8.99 | 8.66 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $4,112,700K ÷ $367,200K
= 11.20
The payables turnover ratio for Timken Co. has been relatively stable over the past eight quarters, ranging between 7.45 and 9.55. This ratio measures how efficiently the company is managing its accounts payable by evaluating the number of times the company pays off its suppliers in a given period. A higher payables turnover ratio generally indicates that the company is paying off its suppliers more quickly.
In this case, the average payables turnover ratio for Timken Co. over the last eight quarters is approximately 8.42. This suggests that on average, the company pays its suppliers approximately 8.42 times per year.
It is important to note that a high payables turnover ratio may indicate that the company is effectively managing its cash flow and liquidity, but it could also suggest that the company is taking advantage of early payment discounts offered by suppliers. On the other hand, a low payables turnover ratio may indicate that the company is not efficiently managing its accounts payable or may be experiencing cash flow constraints.
Overall, the stability and consistency of Timken Co.'s payables turnover ratio over the past quarters suggest that the company has been effectively managing its accounts payable and maintaining a good relationship with its suppliers. Analyzing this ratio in conjunction with other financial ratios and metrics would provide a more comprehensive understanding of the company's financial performance and operation efficiency.
Peer comparison
Dec 31, 2023