Freshpet Inc (FRPT)

The analysis of Freshpet Inc.'s accounts payable days over the specified period reveals notable fluctuations in the company's payment practices. As of December 31, 2020, the company’s days of payables stood at approximately 32.31 days. This figure increased significantly in 2021, reaching approximately 59.06 days, indicating a trend towards lengthening the period before settling payables. Such an increase could suggest extended credit terms negotiated with suppliers or delays in payments, which may impact supplier relationships or reflect strategic management of working capital.

However, this upward trend reversed in subsequent years. By December 31, 2022, the days of payables decreased to approximately 49.12 days, indicating a partial reduction in the period taken to pay suppliers. This shift might reflect improved cash management or changes in supplier terms.

Most notably, between December 31, 2022, and December 31, 2023, the days of payables sharply declined to approximately 25.53 days. This significant reduction implies a faster turnaround in paying accounts payable, possibly due to stricter payment policies, improved cash flow, or renegotiation of credit terms favoring quicker payments.

The trend continued marginally into 2024, with the days of payables slightly decreasing further to approximately 24.68 days. The consistent reduction of the payable period suggests a deliberate strategic shift towards prompt payments, which could be aimed at strengthening supplier relationships or optimizing liquidity.

Overall, from 2020 to 2024, Freshpet Inc. exhibited a trajectory moving from extended payment periods toward more prompt settlements with suppliers. This shift indicates a possible strategic emphasis on maintaining strong supplier relationships, improving supplier credit terms, or enhancing overall liquidity management.

Peer comparison

Dec 31, 2024