ProPetro Holding Corp (PUMP)

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	1,431,277	1,188,582	1,164,654	1,196,440	1,180,112	956,707	951,911	888,632	1,002,128	944,863	949,268	959,000	863,739	278,345	284,272	287,139	256,984	221,248	192,075	164,158
Payables	US$ in thousands	161,441	194,569	218,147	246,141	234,299	187,381	170,145	151,668	152,649	167,085	136,364	108,931	79,153	71,577	31,233	198,437	193,096	249,087	284,730	274,016
Payables turnover		8.87	6.11	5.34	4.86	5.04	5.11	5.59	5.86	6.56	5.65	6.96	8.80	10.91	3.89	9.10	1.45	1.33	0.89	0.67	0.60

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,431,277K ÷ $161,441K
= 8.87

The payables turnover ratio measures how efficiently a company is managing its payables by determining how many times a company pays off its average accounts payable balance during a certain period.

Analyzing the payables turnover ratio of ProPetro Holding Corp over the provided time period shows fluctuations in the efficiency of the company's payables management. The ratio has varied from a low of 0.60 in March 2019 to a high of 10.91 in September 2020.

A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently, which could signal good liquidity or strong negotiation power with suppliers. On the other hand, a lower ratio may suggest that the company is taking longer to pay its bills, potentially straining relationships with suppliers or signaling liquidity issues.

ProPetro Holding Corp's payables turnover has generally shown a positive trend over the past years, with some fluctuations. It peaked in September 2020 at 10.91 and has since been above 5, indicating efficient management of payables. However, the ratio dropped significantly to 1.33 in March 2020, potentially due to external factors or internal changes in the company's payment terms.

Overall, it is essential for ProPetro Holding Corp to monitor its payables turnover ratio continuously to ensure effective cash flow management, maintain positive supplier relationships, and support overall financial health.