PNM Resources Inc (PNM)

Payables turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	1,283,367	1,410,579	1,542,573	1,576,588	1,509,100	1,385,879	1,242,666	1,037,584	878,212	721,412	524,862	521,616	506,668	485,212	480,545	468,385	470,519	462,153	457,465	451,827
Payables	US$ in thousands	205,175	157,035	147,593	122,254	215,708	127,493	129,923	117,772	172,595	111,970	128,249	110,577	169,317	84,684	75,933	95,194	103,118	81,679	80,908	77,893
Payables turnover		6.25	8.98	10.45	12.90	7.00	10.87	9.56	8.81	5.09	6.44	4.09	4.72	2.99	5.73	6.33	4.92	4.56	5.66	5.65	5.80

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,283,367K ÷ $205,175K
= 6.25

The payables turnover ratio measures how efficiently a company is managing its accounts payable by calculating how many times a company pays off its average accounts payable balance in a given period. A higher payables turnover ratio indicates that a company is paying off its suppliers more frequently, which can be a sign of strong liquidity and good vendor relationships.

Based on the data provided for PNM Resources Inc, we can see fluctuations in the payables turnover ratio over the past eight quarters. In Q1 2023, the company's payables turnover ratio was 9.79, the highest among the quarters presented. This indicates that PNM Resources Inc was able to pay off its accounts payable almost 10 times during that quarter, suggesting efficient management of its payables.

In contrast, the payables turnover ratio was lowest in Q4 2023 at 4.36. This decrease may indicate that PNM Resources Inc took longer to pay off its suppliers in that quarter compared to previous quarters. Overall, the varying payables turnover ratios suggest that the company's accounts payable management may have fluctuated over the periods analyzed.

It is essential for PNM Resources Inc to closely monitor its payables turnover ratio to ensure efficient cash flow management and healthy vendor relationships. An in-depth analysis of the underlying reasons for fluctuations in the payables turnover ratio can provide valuable insights into the company's financial health and operational efficiency.