H2O America (HTO)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	323,323	281,929	263,524	255,114	247,950
Payables	US$ in thousands	56,256	46,121	29,581	30,391	34,200
Payables turnover		5.75	6.11	8.91	8.39	7.25

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $323,323K ÷ $56,256K
= 5.75

The payables turnover ratio for H2O America has exhibited notable fluctuations over the analyzed period from December 31, 2020, through December 31, 2024. Specifically, the ratio increased from 7.25 times in 2020 to 8.39 times in 2021, indicating an improvement in the company's ability to settle its accounts payable more quickly or a reduction in the average accounts payable balance relative to costs of goods sold (COGS). This upward trend continued into 2022, reaching a ratio of 8.91 times, which suggests further efficiency in managing payable obligations during this period.

However, beginning in 2023, a decline in the payable turnover ratio is observed, decreasing sharply to 6.11 times. This decline signifies that H2O America took longer to pay its suppliers compared to previous years or experienced an increase in average accounts payable balances relative to its COGS. The downward trend persisted into 2024, with the ratio declining further to 5.75 times, suggestive of a continuation of either extended payment terms, shifts in procurement strategies, or possible liquidity considerations affecting the company's ability to pay suppliers promptly.

Overall, the trend indicates an initial period of increasing efficiency in settling obligations, followed by a shift toward longer payment cycles starting in 2023. These movements in the payables turnover ratio may reflect operational, strategic, or financial adjustments within the company, and could have implications for supplier relationships and liquidity management strategies.