Tempur Sealy International Inc (TPX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,796,700 | 2,871,600 | 2,772,100 | 2,038,500 | 1,763,800 |
| Payables | US$ in thousands | 311,300 | 359,800 | 432,000 | 324,100 | 251,700 |
| Payables turnover | 8.98 | 7.98 | 6.42 | 6.29 | 7.01 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $2,796,700K ÷ $311,300K
= 8.98
The payables turnover ratio measures how efficiently a company is managing its payables by comparing the cost of goods sold to the average accounts payable balance. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently during the period.
For Tempur Sealy International Inc, the payables turnover has been fluctuating over the past five years. In 2023, the payables turnover ratio increased to 8.98 from 7.98 in 2022, indicating that the company is paying its suppliers more frequently compared to the previous year. This can suggest improved liquidity or negotiating better credit terms with suppliers.
Comparing to the historical trend, the payables turnover ratio in 2023 is significantly higher than in 2021 and 2020, showing a positive trend in managing payables more effectively. The ratios in 2021 and 2020 were 6.42 and 6.29, respectively, indicating a slower turnover of payables during those years.
However, when comparing 2023 to 2019, the payables turnover ratio decreased from 7.01 to 8.98. This suggests that Tempur Sealy International Inc was managing its payables more efficiently in 2019 compared to 2023.
Overall, the trend in the payables turnover ratio for Tempur Sealy International Inc shows improvements in managing payables efficiently in 2023 compared to the preceding years, although there was a decline from 2019. It is important for the company to continue monitoring and optimizing its payables turnover to ensure effective cash flow management and good relationships with suppliers.
Peer comparison
Dec 31, 2023