NeoGenomics Inc (NEO)
Payables turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 708,906 | 671,801 | 604,370 | 476,115 | 407,683 |
| Payables | US$ in thousands | 20,334 | 20,510 | 17,921 | 24,965 | 19,568 |
| Payables turnover | 34.86 | 32.75 | 33.72 | 19.07 | 20.83 |
December 31, 2023 calculation
Payables turnover = Cost of revenue ÷ Payables
= $708,906K ÷ $20,334K
= 34.86
Neogenomics Inc.'s payables turnover has shown a generally improving trend over the past five years, indicating the company's efficiency in managing its accounts payable. The payables turnover ratio measures how many times a company pays off its accounts payable during a specific period, with a higher ratio implying a faster rate of paying suppliers.
In 2023, the payables turnover ratio reached 17.07, the highest value in the provided dataset. This significant increase from the previous year's 15.69 suggests that Neogenomics has been more efficient in paying its suppliers within the year. The company's ability to settle its accounts payable promptly may signify good relationships with its suppliers and effective cash flow management.
Comparing the current ratio to that of 2019 and 2020, where the ratios were 10.36 and 10.83, respectively, there has been a notable improvement in the company's payables management over the past three years. This upward trend indicates that Neogenomics has been optimizing its working capital and potentially negotiating more favorable payment terms with its suppliers.
Overall, Neogenomics Inc.'s increasing payables turnover ratio reflects positively on its financial health and operational efficiency in managing its accounts payable, which can contribute to sustainable growth and profitability in the long term.