Harmony Biosciences Holdings (HRMY)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	401,928	337,774	269,749	205,969	133,151
Payables	US$ in thousands	13,744	17,730	3,786	1,001	2,556
Payables turnover		29.24	19.05	71.25	205.76	52.09

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $401,928K ÷ $13,744K
= 29.24

The payables turnover ratio measures how efficiently a company is managing its accounts payable by calculating how many times during a period the company pays off its suppliers.

Analyzing the payables turnover of Harmony Biosciences Holdings, we observe fluctuations over the years. In December 31, 2020, the payables turnover ratio was 52.09, indicating that the company paid off its suppliers approximately 52 times during that year. This was significantly improved by the end of December 31, 2021, with a notable increase to 205.76, suggesting a more prompt payment to suppliers.

However, there was a decline in efficiency by December 31, 2022, with the payables turnover falling to 71.25, indicating a decrease in the frequency of paying off suppliers. The efficiency further decreased by December 31, 2023, with a payables turnover of 19.05, implying a slowdown in the payment cycle.

Nevertheless, by December 31, 2024, Harmony Biosciences Holdings managed to improve the payables turnover to 29.24. Although still lower compared to 2021, this shows an effort towards enhancing the efficiency in managing accounts payable.

Overall, fluctuations in the payables turnover ratio of Harmony Biosciences Holdings reflect changes in the company's payment practices and relationships with suppliers over the years. Further analysis of factors contributing to these fluctuations would provide a deeper understanding of the company's financial management strategies.