Otter Tail Corporation (OTTR)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	507,754	518,479	543,960	492,424	5,153
Payables	US$ in thousands	113,574	94,428	104,400	135,089	120,618
Payables turnover		4.47	5.49	5.21	3.65	0.04

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $507,754K ÷ $113,574K
= 4.47

Based on the data provided, the payables turnover ratio for Otter Tail Corporation has shown a significant improvement over the years. The ratio was only 0.04 in December 31, 2020, indicating that the company's payables turnover was quite low.

However, there has been a remarkable increase in the payables turnover ratio since then. By December 31, 2021, the ratio had surged to 3.65, reflecting a substantial increase in the efficiency of paying off its suppliers. This trend continued in the following years, with payables turnover ratios of 5.21, 5.49, and 4.47 for December 31, 2022, 2023, and 2024 respectively.

The steady improvement in the payables turnover ratio suggests that Otter Tail Corporation has been managing its trade payables more effectively. A higher payables turnover ratio indicates that the company is paying its suppliers more promptly, which could lead to better relationships with suppliers and possibly negotiate better terms in the future.

Overall, the increasing payables turnover ratio is a positive indicator of Otter Tail Corporation's efficiency in managing its accounts payable and working capital.