F5 Networks Inc (FFIV)

Payables turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	1,832,870	1,791,260	1,786,160	1,561,500	1,327,730
Payables	US$ in thousands	63,315	113,178	62,096	64,472	62,627
Payables turnover		28.95	15.83	28.76	24.22	21.20

September 30, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,832,870K ÷ $63,315K
= 28.95

The payables turnover ratio measures how efficiently a company manages its accounts payable by evaluating how many times a company pays off its average accounts payable balance during a period. A higher payables turnover ratio generally indicates that a company is paying its suppliers more frequently and efficiently.

Looking at the payables turnover of F5 Inc over the past five years, we can observe a fluctuating trend. In 2019, the payables turnover ratio stood at 5.69, indicating that the company paid off its accounts payable 5.69 times during the year. Subsequently, in 2020, the ratio increased to 6.33, demonstrating an improvement in the efficiency of paying off its payables. This trend continued in 2021 with a further increase to 7.94, suggesting that the company was managing its accounts payable more effectively.

However, in 2022, there was a significant jump in the payables turnover ratio to 4.77, indicating a reduction in the frequency of paying off its accounts payable. This decline raised concerns about the company's ability to manage its payables efficiently.

Nevertheless, F5 Inc rebounded in 2023, achieving a payables turnover ratio of 9.37, signifying a substantial improvement in its payables management and suggesting that the company was paying its suppliers more frequently and effectively.

In conclusion, the fluctuating trend of F5 Inc's payables turnover ratio indicates variations in the efficiency of managing its accounts payable over the years. The recent surge in the payables turnover ratio in 2023 suggests a positive shift towards more effective management of payables, which may be indicative of improved liquidity and operational efficiency. However, close monitoring of this ratio in subsequent periods will be essential to assess the sustainability of this improvement.