Unifirst Corporation (UNF)
Payables turnover
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,481,300 | 1,306,450 | 1,141,280 | 1,164,930 | 1,139,200 |
| Payables | US$ in thousands | 92,730 | 82,131 | 81,356 | 64,035 | 77,918 |
| Payables turnover | 15.97 | 15.91 | 14.03 | 18.19 | 14.62 |
August 26, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,481,300K ÷ $92,730K
= 15.97
The payables turnover ratio measures how efficiently a company manages its payables by comparing the cost of goods sold to average accounts payable over a specific period. A higher payables turnover ratio generally indicates that a company is paying its suppliers more quickly, which can be a positive sign of financial health.
Analyzing the payables turnover for Unifirst Corp over the past five years, we see a fluctuating trend. In 2019, the payables turnover ratio was 14.62, indicating that the company managed to pay its suppliers 14.62 times over the course of the year. This suggests a moderate level of efficiency in managing payables.
The payables turnover ratio then increased significantly to 18.19 in 2020, indicating that Unifirst Corp was able to pay its suppliers at an even faster rate, which could be a positive indicator of improved cash flow and supplier relationships.
However, in 2021, the payables turnover ratio decreased to 14.03, signaling a decrease in the speed of paying suppliers. This could be influenced by various factors such as changes in the company's operations, payment terms negotiation with suppliers, or changes in the industry landscape.
The ratio rebounded in 2022 to 15.91, showing an improvement in paying suppliers more efficiently compared to the previous year. In the most recent financial year, the payables turnover ratio was 15.97, remaining relatively stable and indicating that Unifirst Corp continued to manage its payables at a similar pace as in the prior year, though slightly improved.
In conclusion, Unifirst Corp's payables turnover ratio has generally exhibited a fluctuating but relatively stable trend over the past five years. While there have been some variations, the company has demonstrated the ability to manage its payables efficiently, albeit with some fluctuations from year to year. It would be important to further investigate the specific factors influencing these fluctuations to gain a more comprehensive understanding of the company's payables management.
Peer comparison
Aug 26, 2023