Workday Inc (WDAY)

Payables turnover

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020
Cost of revenue (ttm)	US$ in thousands	3,624,000	3,487,743	3,351,201	3,222,348	3,123,000	3,059,369	2,992,669	2,920,173	2,816,537	2,698,743	2,558,091	2,423,532	2,291,656	2,181,295	2,084,947	1,976,796	1,940,898	1,903,477	1,872,630	1,857,236
Payables	US$ in thousands	108,000	74,000	87,000	76,000	78,000	79,333	88,814	113,263	154,000	75,803	60,710	123,361	55,487	47,928	53,082	48,097	75,596	54,949	57,764	35,430
Payables turnover		33.56	47.13	38.52	42.40	40.04	38.56	33.70	25.78	18.29	35.60	42.14	19.65	41.30	45.51	39.28	41.10	25.67	34.64	32.42	52.42

January 31, 2025 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $3,624,000K ÷ $108,000K
= 33.56

Workday Inc's payables turnover ratio measures how efficiently the company is managing its accounts payable by indicating the number of times the company pays its suppliers during a specific period.

Analyzing the payables turnover ratios from January 31, 2023, to January 31, 2025, reveals fluctuations in the company's payment efficiency. The payables turnover ratio was 18.29 on January 31, 2023, indicating that Workday took approximately 18.29 days to pay its suppliers. This low turnover ratio suggests a longer payment period.

However, the payables turnover improved to 40.04 on January 31, 2024, signifying that Workday started paying its suppliers more frequently, possibly to take advantage of early payment discounts or to strengthen supplier relationships. The ratio further increased to 42.40 on April 30, 2024, before slightly decreasing to 38.52 on July 31, 2024.

By October 31, 2024, the payables turnover ratio rose again to 47.13, demonstrating a quicker payment cycle compared to the prior periods. This may indicate effective working capital management and improved cash flow management by Workday.

As of January 31, 2025, the payables turnover ratio declined to 33.56, suggesting a longer payment period compared to the previous quarter but still showing an overall improvement compared to earlier periods.

Overall, fluctuations in the payables turnover ratio can reflect changes in the company's liquidity position, payment policies, and relationships with suppliers. Workday's management should continue monitoring and optimizing this ratio to maintain efficient payables management.