Medpace Holdings Inc (MEDP)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	1,634,380	1,524,890	1,162,310	927,757	747,231
Payables	US$ in thousands	32,528	31,869	33,069	25,678	26,552
Payables turnover		50.25	47.85	35.15	36.13	28.14

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,634,380K ÷ $32,528K
= 50.25

Based on the data provided, the payables turnover for Medpace Holdings Inc has been showing a generally increasing trend over the years. The payables turnover ratio measures how effectively a company is managing its accounts payable by calculating how many times during a period the company pays off its average accounts payable balance.

In December 31, 2020, the payables turnover ratio was 28.14. It increased to 36.13 by December 31, 2021, indicating that the company was more efficient in paying off its accounts payable compared to the previous year. This trend continued with the payables turnover ratio reaching 35.15 by December 31, 2022, and further improving to 47.85 by December 31, 2023, and 50.25 by December 31, 2024.

The increasing trend in payables turnover ratios suggests that Medpace Holdings Inc has been managing its accounts payable more effectively and efficiently over the years. A higher payables turnover ratio generally indicates that the company is paying off its suppliers quickly, which can be a positive sign of strong financial management and good relationships with suppliers. It shows that the company is able to manage its working capital efficiently and may also negotiate favorable credit terms with its suppliers, leading to potential cost savings.