Freshpet Inc (FRPT)

Payables turnover

Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cost of revenue (ttm) US$ in thousands 607,874 585,612 579,894 563,102 541,005 520,568 495,301 467,761 437,447 408,104 362,634 321,911 293,663 263,343 242,678 224,148 204,670 185,879 167,392 154,417
Payables US$ in thousands 42,763 39,164 35,481 34,051 46,591 36,096 40,908 32,389 26,391 55,088 37,046 39,507 77,151 42,612 12,828 39,159 30,955 16,452 10,743 9,090
Payables turnover 14.21 14.95 16.34 16.54 11.61 14.42 12.11 14.44 16.58 7.41 9.79 8.15 3.81 6.18 18.92 5.72 6.61 11.30 15.58 16.99

March 31, 2025 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $607,874K ÷ $42,763K
= 14.21

The payables turnover ratio for Freshpet Inc exhibits significant fluctuations over the analyzed period from June 30, 2020, to March 31, 2025. Initially, the ratio was relatively high at 16.99 times as of June 30, 2020, indicating that the company was paying its accounts payable approximately 17 times per year, suggesting prompt settlement or efficient management of payables. This high level persisted through September 30, 2020, at 15.58, and then experienced a notable decline by December 31, 2020, to 11.30, reflecting a decrease in payment frequency.

The ratio continued to decline sharply in the first quarter of 2021, reaching a low of 6.61, which may imply lengthening of payment periods or a strategic shift in accounts payable practices. This downward trend persisted into mid-2021, with the ratio falling further to 5.72 at June 30, 2021. Subsequently, a remarkable rebound occurred by September 30, 2021, where the ratio rose sharply to 18.92, suggesting a significant improvement in payables management or possibly shortened payment cycles.

Over the subsequent quarters, the ratio experienced volatility, declining again to 6.18 in December 2021 and dropping further to 3.81 by March 2022, which indicates extended payment periods and possibly stretched credit terms with suppliers. The ratio then increased gradually through 2022, reaching 9.79 by September 2022 and stabilizing somewhat around the 7-8 range for the remainder of 2022.

A notable rise occurred again in the first quarter of 2023, with the ratio climbing to 16.58, pointing to a tightening of payables payment practices or improved negotiating terms. Throughout 2023, the ratio fluctuated within the 12 to 14 range before peaking at 16.54 in June 2024, suggesting a period of shorter payment cycles.

In the most recent periods, the ratio slightly decreased but remained relatively high, with 14.95 in December 2024 and 14.21 as of March 31, 2025. Overall, the pattern indicates periods of both extending and shortening of payables, reflecting potential changes in supplier relationships, liquidity management strategies, or operational needs. The significant oscillations highlight a lack of a stable trend but suggest strategic adjustments in how the company manages its short-term obligations over time.