Progress Software Corporation (PRGS)

Payables turnover

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Cost of revenue (ttm)	US$ in thousands	133,169	126,577	116,445	107,322	97,501	94,496	92,045	88,317	83,670	78,449	75,600	70,270	65,219	62,114	64,649	70,736	74,088	75,241	71,206	67,077
Payables	US$ in thousands	9,921	12,371	8,729	7,162	10,464	9,282	7,717	9,917	8,041	9,683	6,667	11,358	10,105	9,978	6,372	8,815	10,215	10,603	6,882	9,541
Payables turnover		13.42	10.23	13.34	14.98	9.32	10.18	11.93	8.91	10.41	8.10	11.34	6.19	6.45	6.23	10.15	8.02	7.25	7.10	10.35	7.03

February 29, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $133,169K ÷ $9,921K
= 13.42

The payables turnover ratio measures how efficiently a company pays its suppliers. A higher payables turnover implies that the company is paying its suppliers more frequently, which could be a sign of efficient cash management or strong supplier relationships.

In analyzing the payables turnover of Progress Software Corporation over the given period, we observe some fluctuations. The ratio ranged from 6.19 to 14.98, indicating variations in the company's payment practices.

The highest payables turnover of 14.98 in May 2023 suggests that Progress Software was paying its suppliers almost 15 times during that period. This could indicate a proactive approach to managing supplier payments, potentially capitalizing on discounts for early payment.

On the other hand, the lowest payables turnover of 6.19 in August 2021 implies that Progress Software paid its suppliers less frequently during that period. This could be due to various reasons, such as managing cash flow or negotiating extended payment terms with suppliers.

Overall, the varying payables turnover ratios demonstrate that Progress Software's payment practices have been dynamic over time, reflecting different strategies in managing its accounts payable. It would be important to further investigate the reasons behind these fluctuations to gain a deeper understanding of the company's financial management processes.