United Parcel Service Inc (UPS)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 57,919,000 | 59,505,000 | 55,675,000 | 52,220,000 | 46,204,000 |
| Payables | US$ in thousands | 6,340,000 | 7,515,000 | 7,523,000 | 6,455,000 | 5,555,000 |
| Payables turnover | 9.14 | 7.92 | 7.40 | 8.09 | 8.32 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $57,919,000K ÷ $6,340,000K
= 9.14
The payables turnover ratio for United Parcel Service, Inc. from 2019 to 2023 has consistently been reported as 0.00. A payables turnover ratio of 0.00 indicates that the company is not effectively managing its accounts payable or is not making use of its trade credit in a significant manner. This could imply that United Parcel Service, Inc. is holding onto its payables for an extended period, potentially missing out on potential discounts for early payments or encountering cash flow issues that prevent timely settlement of obligations to suppliers. It is essential for the company to assess and improve its payables management process to enhance liquidity and strengthen relationships with vendors.