Viatris Inc (VTRS)

Payables turnover

		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	8,988,300	9,349,400	9,428,600	9,532,100	9,765,700	9,959,000	10,591,700	11,428,300	12,310,800	12,432,700	11,283,800	9,739,200	8,540,600
Payables	US$ in thousands	1,938,200	1,989,100	1,962,000	1,957,500	1,766,600	1,310,500	1,670,100	1,499,600	1,657,400	1,659,600	1,800,200	2,043,200	1,904,200	—	—	—
Payables turnover		4.64	4.70	4.81	4.87	5.53	7.60	6.34	7.62	7.43	7.49	6.27	4.77	4.49

December 31, 2023 calculation

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

To analyze Viatris Inc's payables turnover, we observe a declining trend over the past eight quarters. The payables turnover ratio measures how efficiently a company is managing its accounts payable by comparing the cost of goods sold to its average accounts payable balance. A higher ratio typically indicates a more efficient use of suppliers' financing.

Viatris Inc's payables turnover decreased from 7.62 in Q1 2022 to 4.64 in Q4 2023, indicating a decrease in how quickly the company is paying its suppliers. This trend suggests that the company is taking longer to settle its payables, which could be due to various reasons such as negotiations with suppliers, a change in payment terms, or a strain on liquidity.

It is essential to monitor payables turnover as a significant decrease could signal liquidity issues or strained relationships with suppliers. Management should assess the reasons behind the declining trend and take appropriate actions to optimize the company's payables management.