OSI Systems Inc (OSIS)

Payables turnover

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Cost of revenue	US$ in thousands	1,125,980	1,008,300	847,917	758,809	726,984
Payables	US$ in thousands	281,304	191,149	139,011	125,204	141,263
Payables turnover		4.00	5.27	6.10	6.06	5.15

June 30, 2025 calculation

Payables turnover = Cost of revenue ÷ Payables
= $1,125,980K ÷ $281,304K
= 4.00

The payables turnover ratio for OSI Systems Inc over the specified period demonstrates notable fluctuations, reflecting changes in the company's efficiency in paying its suppliers.

At the close of fiscal year June 30, 2021, the ratio stood at 5.15, indicating that the company paid its accounts payable approximately 5.15 times during that fiscal year. This ratio increased in the subsequent year to 6.06 by June 30, 2022, suggesting an improvement in the company's payment efficiency or a reduction in outstanding payables relative to its cost of goods sold or purchases. A further slight increase to 6.10 was observed by June 30, 2023, reaffirming a trend toward more frequent payments.

However, this upward trend reversed in the following year, with the payables turnover decreasing to 5.27 as of June 30, 2024. This decline indicates a reduction in payment frequency, which could imply extended credit terms, potential liquidity considerations, or changes in procurement practices.

By June 30, 2025, the ratio diminished further to 4.00, suggesting that the company paid its suppliers less frequently or took longer to settle payables relative to its purchases. This downward trend over the recent period may warrant further investigation into the company's cash flow management, supplier relationships, or strategic payment policies.

Overall, the payables turnover ratio exhibited an initial period of improvement followed by a decline, highlighting possible shifts in accounting policies, liquidity position, or operational practices. This metric’s variation over time underscores the importance of correlating it with other financial indicators to fully understand the company's working capital management strategy.