Trex Company Inc (TREX)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 819,033 | 844,285 | 921,976 | 647,596 | 557,548 |
| Payables | US$ in thousands | 23,963 | 19,935 | 24,861 | 38,622 | 15,227 |
| Payables turnover | 34.18 | 42.35 | 37.09 | 16.77 | 36.62 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $819,033K ÷ $23,963K
= 34.18
The payables turnover ratio measures how efficiently a company manages its accounts payable by comparing the cost of goods sold to its average accounts payable during a specific period. A higher payables turnover indicates the company is paying off its suppliers more frequently, which could suggest strong liquidity or effective management of payables.
Looking at TREX Co., Inc.'s payables turnover over the past five years, we observe fluctuations in the ratio. In 2023, the payables turnover decreased to 26.81 from the previous year's 35.22. This decrease suggests that the company took longer to pay off its suppliers in 2023 compared to 2022, indicating a potential slowdown in payables management efficiency.
However, when compared to 2021 and 2019, the payables turnover in 2023 remained higher, indicating a relatively better performance in managing accounts payable during the year.
Analyzing the payables turnover trend further, it is essential to cross-reference this ratio with other financial metrics and performance indicators to understand the broader financial health and operational efficiency of TREX Co., Inc.
Peer comparison
Dec 31, 2023