Digi International Inc (DGII)

Payables turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	174,140	192,646	171,939	141,975	135,299
Payables	US$ in thousands	23,759	17,148	32,373	22,586	28,067
Payables turnover		7.33	11.23	5.31	6.29	4.82

September 30, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $174,140K ÷ $23,759K
= 7.33

The payables turnover ratio for Digi International Inc has fluctuated over the past five years, ranging from a low of 4.82 in 2020 to a high of 11.23 in 2023. This ratio indicates the efficiency with which the company manages its accounts payable by paying off its suppliers. A higher payables turnover ratio signifies that the company is able to pay its suppliers more frequently within a given period, which may indicate effective management of working capital and good relationships with suppliers.

In 2024, the payables turnover ratio decreased to 7.33 from 11.23 in the prior year. While the ratio is still relatively high, this decrease might suggest that the company took longer to pay off its suppliers compared to the previous year. It is crucial for Digi International Inc to monitor its payables turnover ratio closely to ensure that it strikes a balance between timely payments to suppliers and maintaining enough liquidity for operations.

Overall, the trend in the payables turnover ratio shows variability in how efficiently Digi International Inc manages its accounts payable, highlighting the importance of closely monitoring this metric to assess the company's financial health and vendor management practices.