SPS Commerce Inc (SPSC)

Payables turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	210,714	204,169	198,066	190,592	182,069	174,570	167,654	160,640	153,065	147,159	142,897	137,097	131,678	122,964	113,666	106,262	99,836	96,824	95,042	94,416
Payables	US$ in thousands	8,577	8,107	5,877	12,303	7,420	6,195	6,163	5,339	11,256	8,200	4,442	4,731	8,330	3,752	5,942	5,081	5,354	5,036	4,256	4,602
Payables turnover		24.57	25.18	33.70	15.49	24.54	28.18	27.20	30.09	13.60	17.95	32.17	28.98	15.81	32.77	19.13	20.91	18.65	19.23	22.33	20.52

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $210,714K ÷ $8,577K
= 24.57

The payables turnover ratio for SPS Commerce Inc has fluctuated over the period from March 31, 2020, to December 31, 2024. The ratio measures how efficiently the company is managing its accounts payable by calculating how many times a company pays off its average accounts payable balance during a certain period.

The payables turnover ratio increased from March 31, 2020 to June 30, 2020, showing an improvement in how quickly the company was paying off its suppliers. However, it decreased slightly by September 30, 2020, and continued to decline by December 31, 2020.

From March 31, 2021, to September 30, 2021, there was a significant increase in the payables turnover ratio, indicating that SPS Commerce Inc was paying off its suppliers at a much faster rate during this period. This trend continued to rise until June 30, 2022, showing a strong efficiency in managing payables.

By December 31, 2022, the payables turnover ratio dropped significantly, suggesting a potential slowdown in the payment of accounts payable. However, there was a notable increase in the ratio from March 31, 2023, to June 30, 2023, indicating improved efficiency in paying off suppliers.

The payables turnover ratio fluctuated in the subsequent quarters, showing variations in how quickly SPS Commerce Inc was managing its payables. Overall, analyzing the payables turnover ratio helps in understanding the company's ability to efficiently handle its accounts payable and manage cash flow effectively.