PC Connection Inc (CNXN)
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 | 2,757,458 | 2,797,258 | 2,879,922 | 2,966,826 | 3,016,423 | 3,076,808 | 3,056,822 | 2,943,544 | 2,808,280 | 2,692,301 | 2,600,822 | 2,459,149 | 2,527,559 | 2,558,656 | 2,623,028 | 2,793,372 | 2,717,543 | 2,712,755 | 2,656,063 | 2,543,044 |
| Payables | US$ in thousands | 263,682 | 264,502 | 277,235 | 239,058 | 232,638 | 258,596 | 278,446 | 271,411 | 281,836 | 217,084 | 258,163 | 206,542 | 266,846 | 283,163 | 247,005 | 219,917 | 235,641 | 197,736 | 260,162 | 204,196 |
| Payables turnover | 10.46 | 10.58 | 10.39 | 12.41 | 12.97 | 11.90 | 10.98 | 10.85 | 9.96 | 12.40 | 10.07 | 11.91 | 9.47 | 9.04 | 10.62 | 12.70 | 11.53 | 13.72 | 10.21 | 12.45 |
December 31, 2023 calculation
Payables turnover = Cost of revenue (ttm) ÷ Payables
= $2,757,458K ÷ $263,682K
= 10.46
The payables turnover ratio measures how efficiently a company is managing its outstanding payables by evaluating the number of times a company pays off its average accounts payable balance during a specific period.
Analyzing the payables turnover of PC Connection, Inc. over the past eight quarters, we observe fluctuations in this ratio. In Q4 2023, the payables turnover was 8.87, a slight decrease from the previous quarter's 9.00. It indicates that PC Connection, Inc. took approximately 8.87 quarters to pay off its average accounts payable balance during that period.
Compared to the same quarter in the previous year, Q4 2022, the payables turnover has been gradually decreasing. This decline may suggest that the company is taking longer to settle its accounts payable, potentially facing liquidity issues or experiencing challenges in managing its supplier relationships.
Overall, a payables turnover ratio of around 8 to 10 times per year is considered normal for most industries, indicating that PC Connection, Inc. is paying its suppliers within a reasonable timeframe. However, monitoring this ratio over time can provide insights into the company's financial health and its ability to meet its short-term obligations efficiently.
Peer comparison
Dec 31, 2023