HealthEquity Inc (HQY)

Payables turnover

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Cost of revenue (ttm)	US$ in thousands	633,137	716,307	716,519	714,783	713,683	745,181	719,389	706,905	685,117	637,099	630,456	609,252	599,601	521,403	537,391	454,855	358,063	301,876	187,651	171,563
Payables	US$ in thousands	12,041	13,419	12,543	13,362	13,899	15,842	15,841	13,661	27,541	5,244	4,696	9,636	1,614	6,746	11,708	7,338	3,980	7,966	2,740	1,964
Payables turnover		52.58	53.38	57.13	53.49	51.35	47.04	45.41	51.75	24.88	121.49	134.25	63.23	371.50	77.29	45.90	61.99	89.97	37.90	68.49	87.35

January 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $633,137K ÷ $12,041K
= 52.58

The payables turnover ratio measures how efficiently HealthEquity Inc is managing its accounts payables by assessing how many times the company pays off its suppliers within a given period. A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently, which could be a sign of strong liquidity or good vendor relationships.

Analyzing the trend of HealthEquity Inc's payables turnover ratio over the provided periods, we observe fluctuations in the ratio. The ratio ranged between 24.88 and 371.50, indicating significant variability in the management of accounts payables during this time frame.

In general, a very high payables turnover ratio, as seen in some periods such as 371.50, may suggest that the company is paying off its suppliers at a very rapid pace, potentially indicating efficient cash management or possibly early payment discounts. However, an extremely high turnover ratio should be interpreted with caution, as it could also indicate strained supplier relationships or cash flow issues.

Conversely, periods with lower payables turnover ratios, such as 24.88, may suggest that the company is taking a longer time to pay off its suppliers. This could signal cash flow constraints or potential inefficiencies in managing payables.

Overall, the trend in HealthEquity Inc's payables turnover ratio highlights the importance of closely monitoring the company's payment practices and supplier relationships to ensure optimal cash flow management and operational efficiency.