HealthEquity Inc (HQY)

Payables turnover

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Cost of revenue	US$ in thousands	714,614	713,683	685,217	599,701	430,017
Payables	US$ in thousands	12,041	13,899	27,541	1,614	3,980
Payables turnover		59.35	51.35	24.88	371.56	108.04

January 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $714,614K ÷ $12,041K
= 59.35

The payables turnover ratio for HealthEquity Inc has exhibited fluctuations over the past five years. In FY2024, the company achieved a payables turnover of 59.35 times, demonstrating an efficient management of its accounts payable in converting them into purchases or services. This represents an improvement from the previous year where the ratio was 51.35 times.

The substantial increase in the payables turnover in FY2024 compared to FY2023 signifies that the company is possibly enhancing its liquidity position by paying off its accounts payable more frequently within the year.

However, it is important to note that the payables turnover ratio in FY2022 was notably lower at 24.88 times, indicating a potential decrease in the efficiency of HealthEquity Inc in managing its accounts payable during that fiscal year. The significant spike in FY2021 to 371.56 times could suggest a change in payment terms or a rapid turnover of payables within that year, which might not be sustainable in the long term.

Overall, a higher payables turnover ratio reflects a more efficient management of payables, but HealthEquity Inc should ensure that this efficiency is balanced with maintaining good relationships with its suppliers and vendors.