West Pharmaceutical Services Inc (WST)
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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 2,096,500 | 2,006,000 | 1,989,200 | 1,968,800 | 1,958,900 | 2,037,200 | 2,012,600 | 1,982,000 | 1,945,400 | 1,856,800 | 1,781,800 | 1,693,600 | 1,619,300 | 1,490,200 | 1,363,300 | 1,262,000 | 1,234,200 | 1,206,100 | 1,193,900 | 1,187,400 |
| Payables | US$ in thousands | 242,400 | 219,800 | 218,000 | 233,800 | 215,400 | 188,900 | 220,000 | 248,200 | 232,200 | 207,700 | 205,100 | 204,300 | 213,100 | 180,300 | 162,300 | 157,900 | 156,800 | 145,300 | 152,100 | 137,700 |
| Payables turnover | 8.65 | 9.13 | 9.12 | 8.42 | 9.09 | 10.78 | 9.15 | 7.99 | 8.38 | 8.94 | 8.69 | 8.29 | 7.60 | 8.27 | 8.40 | 7.99 | 7.87 | 8.30 | 7.85 | 8.62 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $2,096,500K ÷ $242,400K
= 8.65
The payables turnover ratio measures how efficiently a company is managing its accounts payable by showing how many times a company pays off its average accounts payable balance during a specific period. A higher payables turnover ratio generally indicates that a company is paying off its suppliers more quickly, which can be a positive sign of efficient working capital management.
West Pharmaceutical Services, Inc.'s payables turnover ratio has fluctuated over the past eight quarters. In Q4 2023, the payables turnover ratio was 7.51, which decreased from the previous quarter but remained within a relatively steady range compared to previous quarters. The company's payables turnover ratio reached its peak in Q3 2022 at 9.18 and has since shown some variability, suggesting some changes in the company's accounts payable management practices.
Overall, West Pharmaceutical Services, Inc.'s payables turnover ratio has shown some stability over the period under review, remaining above 6.82 and below 9.18. This indicates that the company is effectively managing its accounts payable obligations and generally paying off its suppliers in a timely manner. However, further analysis in conjunction with other financial ratios and performance indicators would be necessary to gain a more comprehensive understanding of the company's overall financial health and efficiency in managing its working capital.
Peer comparison
Dec 31, 2023