Inspire Medical Systems Inc (INSP)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	659,193	551,334	388,703	237,094	146,297
Payables	US$ in thousands	38,687	38,839	26,847	11,665	7,209
Payables turnover		17.04	14.20	14.48	20.33	20.29

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $659,193K ÷ $38,687K
= 17.04

Inspire Medical Systems Inc's payables turnover ratio has shown consistency and efficiency in managing its accounts payables over the years. The ratio has remained relatively high, ranging from 14.20 to 20.33. A higher payables turnover ratio indicates that the company is paying its suppliers quickly, which can be a positive sign of good financial health and effective working capital management.

In particular, the payables turnover ratio of 20.33 and 20.29 in 2021 and 2020, respectively, suggests that the company is efficiently converting its accounts payables into cash or reducing its outstanding payables promptly. This may reflect favorable relationships with suppliers and good cash flow management practices.

The slight decrease in the payables turnover ratio in 2022 and 2023 to 14.48 and 14.20, respectively, may indicate a potential change in the company's payment terms or perhaps an adjustment in its working capital strategies. However, the ratio remains within a reasonable range, indicating that the company is still managing its payables effectively.

The ratio then increased to 17.04 in 2024, showing a rebound in the efficiency of managing payables. This could be a positive sign of enhanced working capital management and potentially improved cash flow positions.

Overall, while there have been fluctuations in the payables turnover ratio over the years, the general trend suggests that Inspire Medical Systems Inc has maintained a solid control over its accounts payables, demonstrating efficiency and a commitment to managing its working capital effectively.