Trane Technologies plc (TT)
Payables turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 3,760,900 | 4,380,500 | 3,982,700 | 3,526,100 | 3,143,400 | 3,693,500 | 3,282,600 | 2,937,000 | 2,694,200 | 3,669,800 | 3,182,000 | 2,875,800 | 2,569,900 | 11,887,200 | 11,680,300 | 11,215,600 | 11,037,600 | 11,994,000 | 12,804,100 | 13,977,700 |
| Payables | US$ in thousands | 2,148,000 | 2,194,800 | 2,180,100 | 2,008,300 | 2,025,200 | 2,093,300 | 2,176,900 | 1,962,600 | 2,091,600 | 2,061,300 | 2,000,200 | 1,931,600 | 1,787,300 | 1,757,800 | 1,833,200 | 1,608,900 | 1,520,200 | 1,458,800 | 1,368,200 | 1,446,700 |
| Payables turnover | 1.75 | 2.00 | 1.83 | 1.76 | 1.55 | 1.76 | 1.51 | 1.50 | 1.29 | 1.78 | 1.59 | 1.49 | 1.44 | 6.76 | 6.37 | 6.97 | 7.26 | 8.22 | 9.36 | 9.66 |
December 31, 2024 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $3,760,900K ÷ $2,148,000K
= 1.75
The payables turnover ratio for Trane Technologies plc has shown a declining trend over the periods indicated. As of December 31, 2024, the payables turnover ratio stood at 1.75, which signifies that the company is taking approximately 1.75 times to pay off its suppliers. This implies that Trane Technologies plc is taking longer to settle its accounts payable compared to the beginning of the observation period.
A decreasing payables turnover ratio could suggest a slowdown in the company's payment cycle, which may be a reflection of changing payment terms with suppliers, liquidity constraints, or potential inefficiencies in managing accounts payable. It is essential to closely monitor this ratio to ensure the company maintains healthy vendor relationships and manages its working capital effectively.
Further analysis and comparison with industry benchmarks and historical data could provide additional insights into the efficiency of Trane Technologies plc in managing its accounts payable and its overall financial health.