Halozyme Therapeutics Inc (HALO)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	420,816	337,678	133,336	254,974	175,490
Payables	US$ in thousands	11,816	17,693	1,541	1,928	6,434
Payables turnover		35.61	19.09	86.53	132.25	27.28

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $420,816K ÷ $11,816K
= 35.61

Halozyme Therapeutics Inc.'s payables turnover ratio has exhibited variability over the past five years. The payables turnover ratio is a measure of how efficiently a company manages its payables by comparing its purchases to the average accounts payable during a certain period.

In 2023, the payables turnover ratio significantly increased to 16.28 from 7.87 in 2022. This suggests that the company was able to efficiently manage its payables and pay off its debts more frequently in 2023 compared to the previous year. A higher payables turnover ratio indicates that the company is effectively using its suppliers' credit terms to finance its operations.

The sharp increase in the payables turnover ratio in 2023 follows a notable decrease in 2022 from 52.83 in 2021 to 7.87. This decline in 2022 may indicate that the company took longer to pay off its debts compared to the previous year, potentially signaling a change in its payment policies or cash management practices.

Looking back, in 2021, the payables turnover ratio was exceptionally high at 52.83, indicating that Halozyme Therapeutics Inc. effectively managed its payables by paying off its debts more frequently than in other years. On the other hand, in 2020, the ratio decreased to 22.49, which was still above average, indicating a lower but reasonable level of efficiency in managing payables.

Finally, in 2019, the payables turnover ratio stood at 7.08, showing a consistent performance comparable to the 2022 figures. This suggests that the company maintained a relatively stable level of efficiency in managing its payables during that year.

In conclusion, Halozyme Therapeutics Inc.'s payables turnover ratio has shown fluctuations over the past five years, with significant variations in efficiency in managing its accounts payable. The recent increase in the ratio in 2023 could indicate improved payables management practices, while the decreases in 2022 and 2020 might have been reflective of changes in payment policies or cash flow management.