UFP Technologies Inc (UFPT)

Payables turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	564,450	345,736	317,855	192,216	169,182
Payables	US$ in thousands	24,269	22,286	19,961	10,611	4,121
Payables turnover		23.26	15.51	15.92	18.11	41.05

December 31, 2024 calculation

Payables turnover = Cost of revenue ÷ Payables
= $564,450K ÷ $24,269K
= 23.26

The payables turnover ratio measures how quickly a company pays off its suppliers. A higher payables turnover ratio signifies that the company is efficiently managing its payables by paying suppliers more frequently.

UFP Technologies Inc's payables turnover has shown a decline over the years, dropping from 41.05 in December 2020 to 18.11 in December 2021, and further decreasing to 15.92 in December 2022. This downward trend indicates that the company is taking longer to pay off its suppliers, which could suggest potential liquidity issues or changes in payment policies.

However, there was a slight improvement in the payables turnover ratio in December 2024, increasing to 23.26. While this rebound is positive, it is essential for UFP Technologies Inc to monitor its payables turnover closely to ensure efficient management of supplier payments and maintain healthy relationships with its vendors. Further analysis of the company's financial health and cash flow management is recommended to better understand the implications of these fluctuations in the payables turnover ratio.