ePlus inc (PLUS)
Payables turnover
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,674,510 | 1,550,190 | 1,360,040 | 1,174,770 | 1,197,210 |
| Payables | US$ in thousands | 315,676 | 220,159 | 136,161 | 165,162 | 82,919 |
| Payables turnover | 5.30 | 7.04 | 9.99 | 7.11 | 14.44 |
March 31, 2024 calculation
Payables turnover = Cost of revenue ÷ Payables
= $1,674,510K ÷ $315,676K
= 5.30
The payables turnover ratio measures how efficiently a company manages its payables by analyzing how quickly it pays its suppliers. A higher payables turnover ratio indicates that the company is making payments to suppliers at a faster rate. Here is the analysis of ePlus inc's payables turnover based on the data provided:
1. A declining trend in payables turnover ratio from 2020 to 2024 suggests that ePlus inc is taking longer to pay its suppliers over the years. This may indicate a potential strain on the company's liquidity or changes in its payment policies.
2. The payables turnover ratio was highest in 2020 at 14.44, indicating that ePlus inc was paying its suppliers approximately 14.44 times per year. This high turnover rate could suggest efficient management of payables and favorable payment terms with suppliers.
3. In contrast, the payables turnover ratio dropped to 5.30 in 2024, signaling a significant decrease in the frequency of payments to suppliers. This could be a cause for concern as it may indicate a slowdown in operational performance or a shift in the company's relationship with suppliers.
4. Comparing the 2024 payables turnover ratio of 5.30 with the ratios of previous years, particularly the peak in 2020, shows a substantial decrease in the efficiency of payables management at ePlus inc. This decline could potentially impact the company's cash flow and relationships with suppliers.
In conclusion, the decreasing trend in ePlus inc's payables turnover ratio raises flags about its ability to effectively manage its payables and maintain strong relationships with suppliers. Further examination of the company's financial management practices and supplier relationships may be warranted to address the declining efficiency in payables turnover.
Peer comparison
Mar 31, 2024