Eversource Energy (ES)

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	2,953,327	1,551,725	1,658,614	1,317,927	1,616,484	1,628,951	1,533,234	1,441,291	1,301,451	1,267,937	1,262,447	1,255,466	1,163,864	1,095,032	1,080,424	1,337,480	1,292,598	1,326,677	1,301,949	1,018,908
Payables	US$ in thousands	1,869,190	1,642,180	1,549,970	1,821,910	2,113,900	1,459,610	1,353,510	1,494,360	1,672,230	1,289,220	1,061,110	1,060,870	1,370,650	1,222,060	952,132	914,333	1,147,870	892,106	903,431	1,006,770
Payables turnover		1.58	0.94	1.07	0.72	0.76	1.12	1.13	0.96	0.78	0.98	1.19	1.18	0.85	0.90	1.13	1.46	1.13	1.49	1.44	1.01

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $2,953,327K ÷ $1,869,190K
= 1.58

The payables turnover ratio measures how efficiently a company is managing its trade payables by evaluating the number of times a company pays its suppliers during a specific period. A higher payables turnover ratio generally indicates that a company is paying its suppliers more frequently, which can be seen as a positive indicator of strong liquidity and efficient working capital management.

In the case of Eversource Energy, the payables turnover ratio has shown fluctuations over the past eight quarters. The ratio ranged from a low of 2.37 in Q4 2022 to a high of 3.71 in Q2 2023. The overall trend indicates that Eversource Energy has been improving its efficiency in managing its trade payables since Q4 2022, with the ratio generally increasing quarter over quarter.

The increase in payables turnover ratio could suggest that Eversource Energy is efficiently managing its trade payables, possibly negotiating favorable credit terms with suppliers or streamlining its payment processes. This trend may positively impact the company's working capital management and cash flow position.

However, a significantly high payables turnover ratio may also indicate that the company is aggressively stretching its payables, which could strain supplier relationships or signal liquidity issues in the future. Therefore, it is important to monitor this ratio in conjunction with other financial metrics to assess the overall financial health of Eversource Energy.