Black Hills Corporation (BKH)

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	71,600	71,756	71,417	71,915	71,233	68,293	67,387	65,992	64,318	-267,402	-197,377	-198,140	-199,044	131,021	58,758	57,519	56,920	57,858	56,777	57,611
Payables	US$ in thousands	186,400	124,033	133,300	173,221	310,000	187,046	185,735	173,102	217,761	142,130	133,354	160,179	183,340	152,010	118,942	136,344	193,523	145,085	150,508	178,678
Payables turnover		0.38	0.58	0.54	0.42	0.23	0.37	0.36	0.38	0.30	-1.88	-1.48	-1.24	-1.09	0.86	0.49	0.42	0.29	0.40	0.38	0.32

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $71,600K ÷ $186,400K
= 0.38

The payables turnover ratio measures how efficiently a company is managing its accounts payable by calculating the number of times a company pays off its average accounts payable balance during a specific period. A higher payables turnover ratio indicates that a company is paying off its suppliers more frequently.

Based on the data provided for Black Hills Corporation, the payables turnover ratio fluctuated over the past eight quarters. In Q3 2023, the company had a relatively high payables turnover of 9.57, which suggests that Black Hills Corporation paid off its accounts payable almost 10 times during that quarter. This was an increase from the previous quarter and significantly higher than the ratio in Q4 2022.

While Q3 2023 showed a peak in payables turnover, the ratio decreased in Q4 2023 to 5.27. Although lower than the previous quarter, the ratio is still higher than earlier periods in 2022, indicating that Black Hills Corporation is managing its payables more efficiently compared to those periods.

Overall, the fluctuation in payables turnover ratios indicates some variability in how Black Hills Corporation is managing its accounts payable over the analyzed period. It is essential for the company to maintain a balance in payables turnover to ensure effective cash flow management and relationships with suppliers.