Trex Company Inc (TREX)
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 | 818,832 | 813,260 | 764,908 | 781,577 | 844,083 | 955,562 | 1,024,217 | 985,016 | 921,775 | 818,369 | 755,158 | 683,171 | 647,396 | 595,810 | 560,774 | 562,236 | 557,348 | 546,552 | 534,325 | 524,701 |
| Payables | US$ in thousands | 23,963 | 31,795 | 32,228 | 23,136 | 19,935 | 21,880 | 57,825 | 61,707 | 24,861 | 45,415 | 42,876 | 39,167 | 38,622 | 33,345 | 28,135 | 28,917 | 15,227 | 24,641 | 27,307 | 23,528 |
| Payables turnover | 34.17 | 25.58 | 23.73 | 33.78 | 42.34 | 43.67 | 17.71 | 15.96 | 37.08 | 18.02 | 17.61 | 17.44 | 16.76 | 17.87 | 19.93 | 19.44 | 36.60 | 22.18 | 19.57 | 22.30 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $818,832K ÷ $23,963K
= 34.17
The payables turnover ratio for TREX Co., Inc. has exhibited fluctuations over the past eight quarters. The ratio measures how efficiently the company pays its suppliers. A higher payables turnover ratio indicates that the company is managing its accounts payable effectively by paying its suppliers more frequently.
In Q4 2023, the payables turnover ratio was 26.81, which was higher compared to the previous quarter's 20.25. This suggests that the company improved its efficiency in paying off its suppliers within the quarter. The increase in the ratio could be attributed to better cash flow management or negotiation terms with suppliers.
Looking at the trend over the past two years, we observe that the payables turnover ratio has generally been high, indicating that TREX Co., Inc. is proficient in managing its accounts payable. It peaked in Q4 2022 at 35.22 before experiencing a slight decline in the subsequent quarters.
It is important to note that a very high payables turnover ratio may also indicate potential issues, such as aggressive payment terms that could strain the company's liquidity. Conversely, a very low ratio may suggest inefficiencies in managing payables.
Overall, the payables turnover ratio analysis suggests that TREX Co., Inc. has been effectively managing its supplier payments, with some fluctuations that could be influenced by various factors such as seasonality, operational changes, or company policies.
Peer comparison
Dec 31, 2023