Jazz Pharmaceuticals PLC (JAZZ)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,951,870	2,150,260	1,977,780	1,249,950	1,091,760
Payables	US$ in thousands	102,750	90,758	100,298	26,945	45,732
Payables turnover		19.00	23.69	19.72	46.39	23.87

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,951,870K ÷ $102,750K
= 19.00

Jazz Pharmaceuticals plc's payables turnover ratio has shown fluctuations over the past five years. The ratio decreased from 5.53 in 2020 to 4.39 in 2021 before increasing to 5.96 in 2022. In the latest period reported, the ratio stands at 4.24.

A payables turnover ratio of 4.24 indicates that Jazz Pharmaceuticals plc generated $4.24 in net credit purchases for every $1 of accounts payable during the year. A higher payables turnover ratio suggests that the company is efficiently managing its accounts payable by paying them off more frequently.

Overall, the downward trend in the payables turnover ratio from 2022 to 2023 may indicate that Jazz Pharmaceuticals plc is taking longer to pay off its suppliers. This could be due to various reasons, such as renegotiating payment terms or extending credit periods. It is essential for the company to monitor its payables turnover ratio to ensure optimal management of its accounts payable and maintain healthy supplier relationships.