Harmony Biosciences Holdings (HRMY)

Payables turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
Cost of revenue (ttm)	US$ in thousands	337,774	310,467	296,964	285,863	269,749	252,959	234,753	216,188	205,968	191,388	171,741
Payables	US$ in thousands	17,730	6,539	6,563	6,414	3,786	10,049	6,661	6,904	1,001	4,179	2,006	4,391	2,556	9,347
Payables turnover		19.05	47.48	45.25	44.57	71.25	25.17	35.24	31.31	205.76	45.80	85.61

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $337,774K ÷ $17,730K
= 19.05

Harmony Biosciences Holdings Inc's payables turnover ratio has exhibited significant fluctuations over the past eight quarters. The ratio reached its highest point in Q4 2022 at 22.05, indicating that the company was able to pay off its suppliers almost 22 times during that quarter. However, in the most recent quarter, Q4 2023, the payables turnover ratio decreased to 6.84, suggesting a significant decline in the efficiency of paying off suppliers compared to the previous quarter.

The average payables turnover ratio for the last eight quarters is approximately 11.70, indicating that, on average, Harmony Biosciences Holdings Inc has been able to pay its suppliers around 11.70 times over a year.

The fluctuations in the payables turnover ratio may reflect changes in the company's payment terms with suppliers, its cash flow management practices, or shifts in the purchasing and inventory management strategies. A lower payables turnover ratio could indicate that the company is taking longer to pay its suppliers, potentially signaling cash flow constraints or changes in supplier relationships.

It is essential for the company to closely monitor and manage its payables turnover ratio to ensure timely payments to suppliers while maintaining healthy cash flow and vendor relationships. Additionally, analyzing trends in the ratio over time can provide valuable insights into the company's financial performance and operational efficiency.