Simulations Plus Inc (SLP)

Payables turnover

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Cost of revenue	US$ in thousands	57,478	11,630	10,822	10,600	10,649
Payables	US$ in thousands	602	144	225	387	351
Payables turnover		95.48	80.76	48.10	27.39	30.34

August 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $57,478K ÷ $602K
= 95.48

The payables turnover ratio for Simulations Plus Inc has shown a positive trend over the past five years, indicating an improvement in the efficiency of the company's accounts payable management.

The payables turnover ratio has increased from 30.34 in 2020 to 95.48 in 2024. This significant increase suggests that the company is paying off its suppliers at a faster rate in recent years, potentially negotiating more favorable payment terms or managing its working capital more effectively.

A higher payables turnover ratio generally indicates that the company is better at managing its trade credit terms and liabilities, which can result in improved cash flow and liquidity. It also suggests strong relationships with suppliers, possibly leading to discounts or other benefits for prompt payment.

Overall, the increasing trend in Simulations Plus Inc's payables turnover ratio reflects positively on the company's financial management practices and indicates a strengthening position in its supply chain relationships.