Simulations Plus Inc (SLP)

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	16,075	13,611	11,630	10,929	10,527	10,737	10,822	10,930	10,842	10,923	10,600	10,489	10,684	10,439	10,649	10,266	9,924	9,466	9,023	8,852
Payables	US$ in thousands	360	317	144	357	350	238	225	426	414	19	387	298	400	332	351	663	625	585	204	209
Payables turnover		44.65	42.94	80.76	30.61	30.08	45.11	48.10	25.66	26.19	574.89	27.39	35.20	26.71	31.44	30.34	15.48	15.88	16.18	44.23	42.35

February 29, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $16,075K ÷ $360K
= 44.65

The payables turnover ratio for Simulations Plus Inc fluctuated over the past periods, with a high of 574.89 in the third quarter of 2021 and a low of 15.48 in the second quarter of 2020. This ratio indicates how efficiently the company is managing its accounts payable by measuring the number of times the company pays off its suppliers during a specific period.

Generally, a higher payables turnover ratio suggests that the company is paying off its suppliers more frequently, which could imply good financial health and strong supplier relationships. Conversely, a lower ratio may indicate that the company is taking longer to settle its payables, potentially causing strain on supplier relationships or cash flow management.

The company should aim for a balance in its payables turnover ratio, ensuring timely payments to suppliers without compromising its own liquidity or operational efficiency. Monitoring this ratio over time can help management assess the effectiveness of their payables management practices and make adjustments as needed.