Walgreens Boots Alliance Inc (WBA)
Payables turnover
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 149,818,000 | 134,560,000 | 130,222,000 | 141,859,000 | 132,887,000 |
| Payables | US$ in thousands | 12,635,000 | 11,255,000 | 11,136,000 | 10,145,000 | 14,341,000 |
| Payables turnover | 11.86 | 11.96 | 11.69 | 13.98 | 9.27 |
August 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $149,818,000K ÷ $12,635,000K
= 11.86
The payables turnover ratio measures how quickly a company is paying its suppliers for goods and services purchased on credit. A higher payables turnover ratio typically indicates that the company is efficiently managing its accounts payable by paying its suppliers in a timely manner.
Looking at the payables turnover for Walgreens Boots Alliance Inc over the past five years, we can see a fluctuating trend. In 2019, the payables turnover was 7.45, and it increased to 7.71 in 2020. This suggests a slight improvement in the company's ability to manage its payables more efficiently.
However, there was a more significant increase in the payables turnover ratio in 2021, reaching 9.38, indicating that the company was paying its suppliers at a faster rate compared to the previous year. This trend continued in 2022 with a payables turnover of 9.28, although it slightly decreased to 8.86 in 2023.
The declining payables turnover ratio from 2022 to 2023 may be a cause for concern, as it suggests that the company is taking longer to pay its suppliers compared to the previous year. This could potentially strain the company's relationships with its suppliers and impact its ability to negotiate favorable payment terms in the future.
Overall, while Walgreens Boots Alliance Inc has shown improvements in its payables turnover over the past five years, the recent decline in the ratio should prompt the company to reevaluate its accounts payable management in order to maintain efficient and mutually beneficial relationships with its suppliers.
Peer comparison
Aug 31, 2023