Certara Inc (CERT)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 141,022 | 132,577 | 111,616 |
| Payables | US$ in thousands | 5,171 | 7,533 | 7,458 |
| Payables turnover | 27.27 | 17.60 | 14.97 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $141,022K ÷ $5,171K
= 27.27
The payables turnover ratio measures how efficiently a company manages its trade credit by calculating how many times a company pays its average accounts payable balance during a period.
Analyzing Certara Inc's payables turnover over the past four years, we observe a positive trend in the efficiency of managing its payables. The ratio has increased from 15.76 in 2020 to 27.27 in 2023, indicating an improvement in the company's ability to pay off its suppliers.
A higher payables turnover ratio suggests that Certara Inc is paying its suppliers more frequently, which may lead to better relationships with suppliers and potentially more favorable credit terms. However, an extremely high ratio could indicate that the company is aggressively managing its cash flow at the expense of supplier relationships.
Overall, the increasing trend in Certara Inc's payables turnover ratio signals improved efficiency in managing its accounts payable over the years, which is a positive indicator of the company's financial health and operational effectiveness.
Peer comparison
Dec 31, 2023