Tandem Diabetes Care Inc (TNDM)

Payables turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	746,331	736,212	599,792	452,413	339,528
Payables	US$ in thousands	49,586	55,730	28,032	17,805	17,745
Payables turnover		15.05	13.21	21.40	25.41	19.13

December 31, 2023 calculation

Payables turnover = Cost of revenue ÷ Payables
= $746,331K ÷ $49,586K
= 15.05

Payables turnover measures how efficiently a company is managing its accounts payable by calculating how many times a company pays off its accounts payable balance in a given period. A higher payables turnover ratio indicates that the company is paying off its suppliers more frequently.

In the case of Tandem Diabetes Care Inc, the payables turnover ratio has fluctuated over the past five years. In 2023, the payables turnover was 7.66, which means Tandem Diabetes Care Inc paid off its accounts payable balance approximately 7.66 times during the year. Compared to the previous year, the payables turnover ratio increased from 6.97 in 2022 to 7.66 in 2023, indicating an improvement in how efficiently the company manages its accounts payable.

However, when looking at a longer-term trend, the payables turnover ratio has decreased compared to 2019 and 2020 when it was 9.47 and 13.38, respectively. This downward trend could signal that Tandem Diabetes Care Inc is taking longer to pay off its suppliers, which may impact its relationships with vendors or indicate potential liquidity issues.

Overall, while the recent increase in payables turnover in 2023 is a positive sign, investors and analysts should continue to monitor this ratio in conjunction with other financial indicators to assess Tandem Diabetes Care Inc's financial health and supplier relationships effectively.