Worthington Industries Inc (WOR)
Payables turnover
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,253,080 | 4,527,400 | 2,532,350 | 2,615,780 | 3,279,600 |
| Payables | US$ in thousands | 126,743 | 668,438 | 567,392 | 247,017 | 393,517 |
| Payables turnover | 33.56 | 6.77 | 4.46 | 10.59 | 8.33 |
May 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $4,253,080K ÷ $126,743K
= 33.56
The payables turnover ratio measures how efficiently a company is managing its accounts payable in relation to its purchases. In the case of Worthington Enterprises Inc., there has been a fluctuation in the payables turnover ratio over the past five years.
In 2023, the payables turnover ratio was 8.04, indicating that the company paid its suppliers approximately 8.04 times during the year. This represents an improvement from the previous year's ratio of 6.77. The increase suggests that the company is paying its suppliers more frequently, which could indicate an effort to manage payables more efficiently.
Comparing to 2021, where the payables turnover ratio was 4.46, there has been a significant increase in 2023, signifying a better management of the company's accounts payable in relation to its purchases. However, this ratio is lower than in 2020, when it stood at 10.59, which could be a sign of a longer payment period to suppliers in 2023.
The trend of payables turnover should be looked at in conjunction with the company's payment policies and industry standards to truly understand the implications of the changes in the payables turnover ratio.
Peer comparison
May 31, 2023