SPS Commerce Inc (SPSC)

Payables turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	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	92,239	89,507	86,655	83,357
Payables	US$ in thousands	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	4,274	4,367	3,708	4,391
Payables turnover		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	21.58	20.50	23.37	18.98

December 31, 2023 calculation

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

The payables turnover ratio measures how efficiently a company manages its accounts payable by comparing the amount of purchases made on credit to the average accounts payable balance during a specific period. Higher payables turnover ratios indicate that the company is paying its suppliers more quickly.

Analyzing the payables turnover ratio of SPS Commerce Inc. over the past eight quarters shows fluctuations in the efficiency of the company's accounts payable management. In Q4 2023, the payables turnover ratio was 24.54, which decreased from 30.09 in Q1 2023. This decrease suggests that the company took more time to pay its suppliers in Q4 2023 compared to Q1 2023.

Looking at a more extended trend, there was a significant improvement in the payables turnover ratio from Q4 2022 to Q2 2022, indicating better management of accounts payable during that period. However, the ratio decreased in Q3 2022 before bouncing back in the subsequent quarter.

Overall, the payables turnover ratio of SPS Commerce Inc. has shown varying levels of efficiency in managing its accounts payable over the past eight quarters, suggesting fluctuations in the company's working capital management practices and its relationships with suppliers.