Guidewire Software Inc (GWRE)

Payables turnover

		Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Cost of revenue	US$ in thousands	785,998	829,923	795,936	666,312	608,259
Payables	US$ in thousands	15,209	34,627	40,440	27,830	22,634
Payables turnover		51.68	23.97	19.68	23.94	26.87

July 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $785,998K ÷ $15,209K
= 51.68

The payables turnover ratio for Guidewire Software Inc has shown some fluctuations over the past five years. In July 2020, the payables turnover stood at 26.87, indicating that the company was able to pay off its accounts payable almost 27 times during that year. However, by July 2022, the payables turnover had decreased to 19.68, suggesting a slowdown in the rate at which the company was settling its payables.

Subsequently, there was an improvement in the payables turnover ratio by July 2023, rebounding to 23.97. This uptick potentially indicates that the company made progress in managing its payables more efficiently. Notably, a significant increase was observed by July 2024, with the payables turnover soaring to 51.68. Such a high ratio may signify that Guidewire Software Inc was more aggressive in paying off its suppliers or that there were changes in its payment terms.

Overall, fluctuations in the payables turnover ratio can provide insights into the company's liquidity management, supplier relationships, and operational efficiency in managing its accounts payable. Monitoring this ratio over time can be crucial for assessing the company's ability to meet its short-term obligations effectively.