A10 Network (ATEN)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	160,823	168,861	163,477	151,131	169,298
Payables	US$ in thousands	7,024	6,725	6,852	4,851	7,592
Payables turnover		22.90	25.11	23.86	31.15	22.30

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $160,823K ÷ $7,024K
= 22.90

The payables turnover ratio measures how efficiently a company manages its accounts payable by comparing the cost of goods sold to its average accounts payable balance. A higher payables turnover suggests that the company is paying its suppliers more frequently within a year.

Analyzing the payables turnover ratio of A10 Networks Inc over the past five years, we observe fluctuations in the efficiency of its payables management. The ratio decreased from 6.44 in 2019 to 10.34 in 2020, indicating that the company took longer to pay its suppliers in 2019 but improved its payables turnover significantly in 2020. However, the ratio dropped to 7.81 in 2021 and further to 8.45 in 2022, suggesting a slight decline in efficiency.

In 2023, the payables turnover ratio further decreased to 6.83, reflecting a potential slowdown in the company's accounts payable management efficiency. This trend may indicate that A10 Networks Inc is taking longer to pay its suppliers, which could impact its relationships with creditors and overall liquidity position.

Overall, a decreasing payables turnover ratio over the years could raise concerns about the company's ability to manage its working capital effectively and optimize its cash flows. It is essential for A10 Networks Inc to monitor its payables turnover ratio and strive to strike a balance between extending payment terms and maintaining good relationships with suppliers for sustainable financial health.