ServiceNow Inc (NOW)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,921,000	1,573,000	1,353,000	987,000	796,000
Payables	US$ in thousands	126,000	274,000	89,000	34,000	52,960
Payables turnover		15.25	5.74	15.20	29.03	15.03

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,921,000K ÷ $126,000K
= 15.25

ServiceNow Inc's payables turnover has fluctuated over the past five years. The payables turnover ratio represents the efficiency with which the company pays its suppliers. A higher ratio indicates that the company is paying its suppliers more frequently.

In 2023, the payables turnover ratio increased significantly to 15.25, reflecting an improvement in the company's ability to manage its accounts payable compared to the previous year. This suggests that ServiceNow Inc is paying its suppliers at a faster pace, which can be beneficial in maintaining good relationships and potentially negotiating more favorable terms.

In 2022, the payables turnover ratio was 5.74, indicating a lower frequency of payments to suppliers. However, the ratio rebounded in 2023, showing an increase in the company's efficiency in managing its accounts payable.

In 2021 and 2019, the payables turnover ratios were 15.20 and 15.04 respectively, indicating consistent performance in managing payables over these years. A relatively stable payables turnover ratio suggests that the company has been effectively managing its accounts payable during these periods.

On the other hand, in 2020, the payables turnover ratio spiked to 28.83, signaling a significant increase in the frequency of payments to suppliers. This may reflect an effort by the company to manage cash flow or take advantage of any available discounts for early payments.

Overall, ServiceNow Inc's payables turnover has shown variability over the past five years, with the company exhibiting different levels of efficiency in managing its payables. This fluctuation may be influenced by changing business conditions, cash flow management strategies, or shifts in supplier relationships.