Zurn Elkay Water Solutions Corporation (ZWS)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 882,400 | 816,300 | 537,700 | 1,745,700 | 1,266,100 |
| Payables | US$ in thousands | 56,400 | 116,900 | 105,100 | 185,600 | 191,700 |
| Payables turnover | 15.65 | 6.98 | 5.12 | 9.41 | 6.60 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $882,400K ÷ $56,400K
= 15.65
Payables turnover is an important financial ratio that measures how efficiently a company manages its trade payables. The table shows the payables turnover for Zurn Elkay Water Solutions Corporation over the last five fiscal years.
The payables turnover has shown an improving trend over the years, indicating that the company is paying its suppliers more quickly. In 2023, the payables turnover ratio reached 15.65, which is significantly higher than the ratios in the previous years. This suggests that Zurn Elkay Water Solutions Corporation is able to convert its trade payables into cash at a much faster rate in 2023 compared to previous years.
The substantial increase in payables turnover from 2022 to 2023 could be attributed to more effective management of accounts payable, negotiation of improved payment terms with suppliers, or a shift towards a more efficient supply chain. The company's ability to pay off its creditors faster can potentially lead to better relationships with suppliers and improved cash flow management.
However, it is important to note that a very high payables turnover ratio could also indicate that the company is not taking advantage of available credit terms, possibly impacting its liquidity position. Therefore, it is essential for Zurn Elkay Water Solutions Corporation to strike a balance between paying off its payables promptly and utilizing favorable credit terms to maintain a healthy financial position.
Peer comparison
Dec 31, 2023