Otter Tail Corporation (OTTR)

Payables turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	507,755	558,933	547,541	534,417	518,479	446,306	469,701	502,579	543,959	574,607	570,215	542,402	390,348	261,021	127,905	5,799	5,153	5,355	5,606	6,729
Payables	US$ in thousands	113,574	88,885	126,926	92,170	94,428	103,118	104,661	93,543	104,400	121,995	133,287	119,022	135,089	135,437	131,214	113,073	120,618	189,327	133,967	99,501
Payables turnover		4.47	6.29	4.31	5.80	5.49	4.33	4.49	5.37	5.21	4.71	4.28	4.56	2.89	1.93	0.97	0.05	0.04	0.03	0.04	0.07

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $507,755K ÷ $113,574K
= 4.47

Otter Tail Corporation's payables turnover ratio has shown fluctuations over the periods provided in the data. The payables turnover ratio measures how efficiently a company is able to manage its trade payables by comparing the cost of goods sold to its average accounts payable balance.

From March 31, 2020, to December 31, 2024, the payables turnover ratio has ranged from as low as 0.03 to as high as 6.29. A low payables turnover ratio indicates that the company is taking a longer time to pay off its suppliers, while a high ratio suggests that the company is paying its suppliers more quickly.

The trend of the payables turnover ratio for Otter Tail Corporation shows some volatility, with peaks and troughs throughout the periods. It is important to investigate the reasons behind these fluctuations to assess the company's relationship with its suppliers, its liquidity management, and potential changes in its payment policies.

Overall, a rising trend in the payables turnover ratio over time could indicate an improvement in the company's efficiency in managing its payables, whereas a declining trend may raise concerns about potential cash flow issues or strained relations with suppliers. A thorough analysis of the company's financial health and operational efficiency is recommended to gain a deeper understanding of its payables turnover performance.