SolarWinds Corp (SWI)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	87,005	95,983	227,016	211,443	198,134
Payables	US$ in thousands	9,701	14,045	7,327	12,390	13,796
Payables turnover		8.97	6.83	30.98	17.07	14.36

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $87,005K ÷ $9,701K
= 8.97

The payables turnover ratio for SolarWinds Corp has shown fluctuations over the past five years. In 2023, the payables turnover ratio was 8.97, indicating that the company paid its suppliers approximately 8.97 times during the year. This represents an improvement compared to the preceding year, 2022, where the ratio was 6.83.

However, when comparing the data with earlier years, it is evident that there were significant variations. In 2021, the payables turnover ratio spiked to 30.98, which could suggest that the company was paying its suppliers at a much faster rate compared to the other years. This rapid turnover decreased in 2022 but still remained high relative to previous years.

In the context of liquidity and operational efficiency, a higher payables turnover ratio generally indicates that the company is managing its payables effectively and may be taking advantage of trade credit terms to improve cash flow. Conversely, a lower ratio could signal inefficiencies in managing payables or potentially strained supplier relationships.

Overall, the trend in SolarWinds Corp's payables turnover ratio indicates fluctuations in how the company manages its accounts payable over the years, reflecting changes in its payment practices and relationships with suppliers. Further analysis and context are necessary to fully understand the implications of these fluctuations on the company's financial health and operations.