Simulations Plus Inc (SLP)

Payables turnover

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Cost of revenue	US$ in thousands	11,630	10,822	10,600	10,649	9,026
Payables	US$ in thousands	144	225	387	351	204
Payables turnover		80.76	48.10	27.39	30.34	44.25

August 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $11,630K ÷ $144K
= 80.76

The payables turnover ratio measures how efficiently a company pays its suppliers. Simulations Plus Inc.'s payables turnover has shown a significant increase from 27.39 in 2021 to 80.76 in 2023. This indicates that the company is paying its suppliers at a much faster rate, which may reflect improved cash flow management or more favorable payment terms negotiated with suppliers. The sharp increase in the payables turnover ratio suggests that Simulations Plus Inc. has been effective in managing its accounts payable, potentially strengthening its relationships with suppliers and enhancing its working capital management. This trend could also indicate the company's ability to maintain strong supplier relationships while efficiently using its cash resources. The consistently high payables turnover ratio demonstrates the company's effective management of trade payables over the years, contributing to its overall financial performance and operational efficiency.