Liquidity Services Inc (LQDT)

Payables turnover

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Cost of revenue (ttm)	US$ in thousands	269,017	244,260	233,311	225,761	223,818	219,797	210,294	198,965	194,854	190,037	188,995	183,355	175,496	167,339	157,908	159,674	162,485	168,906	176,915	150,578
Payables	US$ in thousands	58,693	40,877	48,410	32,389	39,115	44,606	42,915	31,592	41,982	47,206	41,029	31,957	40,611	39,748	36,904	25,258	21,957	29,002	19,166	9,714
Payables turnover		4.58	5.98	4.82	6.97	5.72	4.93	4.90	6.30	4.64	4.03	4.61	5.74	4.32	4.21	4.28	6.32	7.40	5.82	9.23	15.50

September 30, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $269,017K ÷ $58,693K
= 4.58

Payables turnover ratio measures how efficiently a company manages its accounts payable. It indicates how quickly a company pays its suppliers.

Analyzing Liquidity Services Inc's payables turnover over the past 8 quarters, we observe fluctuations in the ratio. The ratio ranged from a low of 4.03 in June 2022 to a high of 15.50 in December 2019.

The payables turnover ratio has been above 1 consistently, indicating that the company is paying its suppliers within a year. A higher turnover ratio suggests that the company is effectively managing its payables, paying suppliers quickly, and possibly taking advantage of discounts for early payments.

The decreasing trend from 2019 to 2022 could signify improved bargaining power with suppliers or more efficient cash management. However, potential concerns may arise if the ratio continues to decrease, indicating possible liquidity issues or strained supplier relationships.

The recent increase in the payables turnover ratio since 2022 suggests that the company may be taking longer to pay its suppliers relative to the previous periods. It is essential for the company to monitor this ratio closely to ensure efficient management of payables and maintain healthy supplier relationships.

Overall, Liquidity Services Inc's payables turnover ratio provides valuable insights into the company's management of accounts payable and its relationships with suppliers, which are crucial for assessing financial health and efficiency.