Vertex Pharmaceuticals Inc (VRTX)

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	3,045,900	2,975,300	2,793,400	2,620,500	2,443,200	2,263,400	2,217,100	2,123,000	2,076,000	2,028,752	1,927,253	1,872,794	1,796,200	1,656,692	1,592,724	1,546,407	1,506,756	1,472,101	1,405,173	1,321,091
Payables	US$ in thousands	413,000	395,800	327,900	351,400	364,900	375,900	363,000	323,200	303,900	126,900	198,000	173,600	195,000	127,863	127,534	127,839	155,100	107,786	101,451	100,703
Payables turnover		7.38	7.52	8.52	7.46	6.70	6.02	6.11	6.57	6.83	15.99	9.73	10.79	9.21	12.96	12.49	12.10	9.71	13.66	13.85	13.12

December 31, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $3,045,900K ÷ $413,000K
= 7.38

The payables turnover ratio for Vertex Pharmaceuticals Inc has fluctuated over the past few years. The ratio indicates how efficiently the company is managing its payables by measuring the number of times the company pays off its suppliers within a specific period. A higher payables turnover ratio suggests that the company is paying its suppliers more frequently, which may indicate strong liquidity or effective management of trade credit.

Looking at the data provided, we can see that Vertex Pharmaceuticals Inc's payables turnover ratio has ranged from a high of 15.99 in September 2022 to a low of 6.02 in September 2023 and December 2023. The ratio saw significant fluctuations during this period, possibly due to changes in the company's payment terms with suppliers, changes in purchasing volumes, or other factors affecting payables management.

Overall, it is essential for the company to closely monitor its payables turnover ratio to ensure that it strikes the right balance between managing cash flow effectively and maintaining good relationships with suppliers. A stable and optimal payables turnover ratio can reflect positively on the company's financial health and efficiency in managing its working capital.