Now Inc (DNOW)

Payables turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Cost of revenue US$ in thousands 1,806,000 1,653,000 1,292,000 1,658,000 2,525,000
Payables US$ in thousands 288,000 304,000 235,000 172,000 255,000
Payables turnover 6.27 5.44 5.50 9.64 9.90

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,806,000K ÷ $288,000K
= 6.27

The payables turnover for NOW Inc has fluctuated over the past five years. In 2019, the company had a high payables turnover of 9.27, indicating that it was able to efficiently manage its accounts payable by paying them off quickly. However, this ratio decreased to 7.72 in 2020, 5.43 in 2021, and 5.36 in 2022, suggesting a potential slowing down in the management of accounts payable during these years.

The payables turnover ratio improved in 2023 to 6.20, although it remained lower than the levels seen in 2019. A payables turnover ratio of 6.20 indicates that NOW Inc was able to pay off its accounts payable approximately 6.20 times during the year, which may imply a slightly more efficient management of payables compared to the previous two years.

Overall, the trend in the payables turnover ratio for NOW Inc suggests some variability in the efficiency of managing accounts payable over the years, with room for improvement in optimizing payables turnover to potentially enhance cash flow management and liquidity.