United Rentals Inc (URI)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	8,519,000	6,646,000	5,863,000	5,347,000	5,681,000
Payables	US$ in thousands	905,000	1,139,000	816,000	466,000	454,000
Payables turnover		9.41	5.83	7.19	11.47	12.51

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $8,519,000K ÷ $905,000K
= 9.41

The payables turnover ratio measures the efficiency of a company in paying its suppliers. It is calculated by dividing the cost of goods sold by the average accounts payable for a certain period.

Looking at the payables turnover ratio for United Rentals, Inc., it is observed that there has been a fluctuation in the ratio over the past five years. In 2023, the payables turnover ratio stands at 6.82, indicating an improvement from the previous year. This suggests that the company is paying its suppliers more frequently compared to the previous period.

In 2022, the ratio was 4.21, representing a decrease from the prior year. This may suggest that the company took longer to pay its suppliers in comparison to the previous year.

Furthermore, in 2021 and 2020, the payables turnover ratios were 5.21 and 8.04, respectively, showing fluctuations in the company's payment pattern. In 2019, the ratio was at 8.92, which was the highest among the past five years.

Overall, the payables turnover ratio has shown variability over the years, indicating potential changes in the company's payment policies and relationships with suppliers. This could be influenced by various factors such as changes in purchasing strategies, negotiating terms with suppliers, or changes in the company's financial position affecting its ability to pay its payables.