Waste Management Inc (WM)
Payables turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 16,102,000 | 15,071,000 | 14,524,000 | 13,245,000 | 11,356,000 |
| Payables | US$ in thousands | 2,046,000 | 1,709,000 | 1,766,000 | 1,375,000 | 1,121,000 |
| Payables turnover | 7.87 | 8.82 | 8.22 | 9.63 | 10.13 |
December 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $16,102,000K ÷ $2,046,000K
= 7.87
To analyze Waste Management Inc's payables turnover, we will examine the trend over the five years from 2020 to 2024. The payables turnover ratio measures how efficiently a company is managing its accounts payable by calculating how many times during a period the company pays off its average trade payables balance.
Looking at the data provided, we observe a declining trend in Waste Management Inc's payables turnover ratio. In 2020, the payables turnover was 10.13, indicating the company paid off its accounts payable approximately 10 times during the year. However, by 2024, the payables turnover ratio had decreased to 7.87, suggesting the company was taking longer to settle its trade payables.
A decreasing payables turnover ratio could imply that Waste Management Inc is taking more time to pay its suppliers, which may indicate possible cash flow issues or a shift in payment policies. It is essential for the company to closely monitor its payables turnover ratio to ensure efficient management of its working capital and maintain favorable relationships with its suppliers.
Peer comparison
Dec 31, 2024