ServiceNow Inc (NOW)

Payables turnover

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	1,921,000	1,820,000	1,724,000	1,642,000	1,573,000	1,532,000	1,482,000	1,422,000	1,352,000	1,257,000	1,159,000	1,063,000	987,000	918,808	867,601	832,748	796,000	753,354	710,419	665,437
Payables	US$ in thousands	126,000	69,000	171,000	228,000	274,000	195,000	265,000	166,000	89,000	64,000	98,000	109,000	34,000	51,456	85,757	73,904	52,960	61,906	65,711	38,668
Payables turnover		15.25	26.38	10.08	7.20	5.74	7.86	5.59	8.57	15.19	19.64	11.83	9.75	29.03	17.86	10.12	11.27	15.03	12.17	10.81	17.21

December 31, 2023 calculation

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

The payables turnover ratio measures how efficiently a company is managing its payables and is calculated by dividing the total purchases by the average accounts payable. A higher payables turnover ratio indicates that the company is paying its suppliers more frequently or taking longer to settle its payables, while a lower ratio implies a longer payment period.

ServiceNow Inc's payables turnover has fluctuated over the past eight quarters, ranging from 5.60 to 26.38. The significant fluctuations suggest varying levels of efficiency in managing payables during this period.

The highest payables turnover of 26.38 in September 2023 indicates that ServiceNow Inc was able to pay off its suppliers more frequently during that quarter, while the lowest turnover of 5.60 in June 2022 suggests a longer payment period relative to its purchases.

Overall, the analysis of the payables turnover ratio for ServiceNow Inc indicates fluctuations in the efficiency of managing payables, which may have implications for its working capital management and vendor relationships.