SPS Commerce Inc (SPSC)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	182,069	153,065	131,678	99,836	92,239
Payables	US$ in thousands	7,420	11,256	8,330	5,354	4,274
Payables turnover		24.54	13.60	15.81	18.65	21.58

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $182,069K ÷ $7,420K
= 24.54

The payables turnover ratio for SPS Commerce Inc. has exhibited a fluctuating trend over the past five years. The ratio increased significantly from 2019 to 2020, indicating that the company was paying its suppliers more frequently during that period. However, from 2020 to 2021, there was a decrease in the payables turnover ratio, suggesting that the company took longer to settle its payables in 2021 compared to the previous year.

In 2022, the payables turnover ratio further decreased to 13.60, indicating a longer payables turnover cycle for the company. However, in 2023, there was a notable improvement in the payables turnover ratio, increasing to 24.54. This could signify that in 2023, SPS Commerce Inc. managed to settle its payables more efficiently compared to the preceding year.

Overall, while the payables turnover ratio of SPS Commerce Inc. has shown fluctuations, it is essential to assess this ratio in conjunction with other financial metrics to gain a comprehensive understanding of the company's liquidity management and vendor payment practices.