Palo Alto Networks Inc (PANW)

Payables turnover

		Jul 31, 2024	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020
Cost of revenue	US$ in thousands	5,655,100	5,006,300	4,399,500	3,537,600	2,896,600
Payables	US$ in thousands	116,300	132,300	128,000	56,900	63,600
Payables turnover		48.63	37.84	34.37	62.17	45.54

July 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $5,655,100K ÷ $116,300K
= 48.63

The payables turnover ratio for Palo Alto Networks Inc has shown fluctuations over the past five years, ranging from 34.37 to 62.17. This ratio indicates how efficiently the company is managing its accounts payable by comparing the amount owed to suppliers to the average accounts payable balance.

In 2024, the payables turnover ratio of 48.63 suggests that the company is paying its suppliers approximately 48.63 times during the year, which indicates a moderate improvement compared to the prior year figures. This could indicate a more efficient management of accounts payable or potentially renegotiated payment terms with suppliers.

However, it is essential to consider the industry benchmarks and the company's specific circumstances when evaluating the payables turnover ratio. A higher ratio may imply that the company is paying its suppliers quickly, which could be beneficial for maintaining good relationships but may also indicate liquidity issues. Conversely, a lower ratio could suggest a slower payment process, which may benefit cash flow management but could strain supplier relationships.

Overall, while the increasing trend in payables turnover ratio for Palo Alto Networks Inc is a positive signal, further analysis and comparison with industry standards are necessary to fully understand the company's payment practices and financial health.