Viatris Inc (VTRS)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	8,988,300	9,765,700	12,310,800	8,149,300	7,602,900
Payables	US$ in thousands	1,938,200	1,766,600	1,657,400	1,904,200	1,528,100
Payables turnover		4.64	5.53	7.43	4.28	4.98

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $8,988,300K ÷ $1,938,200K
= 4.64

The payables turnover ratio measures how efficiently a company is managing its trade credit obligations by comparing the cost of goods sold to its average accounts payable balance. A higher ratio indicates that the company is paying its suppliers more frequently within a year.

Analyzing Viatris Inc's payables turnover over the past five years, we can observe some fluctuations:

1. In 2023, the payables turnover ratio stands at 4.64, indicating that the company paid its suppliers approximately 4.64 times during the year. This is a decrease from the previous year.

2. In 2022, the ratio increased to 5.53, signaling an improvement in the management of trade credit obligations compared to 2021. This suggests that Viatris Inc might have stretched its accounts payable period or negotiated better payment terms with suppliers.

3. Looking back to 2021, the payables turnover was 7.43, demonstrating a significant increase compared to 2020. This indicates that the company paid its suppliers more frequently during the year, potentially reflecting strong cash flow management.

4. In 2020, the ratio was 4.28, which was a decrease from 2019. This suggests that Viatris Inc extended its accounts payable period or faced challenges in managing trade credit obligations during this period.

5. In 2019, the payables turnover was 4.98, showing a similar trend to 2020.

Overall, the fluctuation in Viatris Inc's payables turnover ratios over the years suggests varying degrees of efficiency in managing trade credit obligations. Further trend analysis and comparison with industry benchmarks may provide additional insights into the company's financial management practices.