Essential Utilities Inc (WTRG)

Payables turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	367,214	36,996	33,691	27,206	21,758	38,198	29,975	24,971	19,569	50,990	46,424	42,144	15,445	271,399	241,391	208,129	201,294	208,366	237,057	273,942
Payables	US$ in thousands	221,191	191,924	178,902	155,722	238,843	217,597	194,105	161,511	192,932	163,836	131,815	121,593	177,489	158,197	124,117	115,611	74,919	57,589	57,463	55,110
Payables turnover		1.66	0.19	0.19	0.17	0.09	0.18	0.15	0.15	0.10	0.31	0.35	0.35	0.09	1.72	1.94	1.80	2.69	3.62	4.13	4.97

December 31, 2023 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $367,214K ÷ $221,191K
= 1.66

Essential Utilities Inc's payables turnover has displayed fluctuations over the past eight quarters. The payables turnover ratio measures how efficiently a company is managing its accounts payable by comparing the amount of payables to the company's purchase activity.

In Q4 2023, the payables turnover ratio was 1.59, indicating that Essential Utilities Inc was taking approximately 1.59 days to pay off its accounts payable. This marks a decrease from the previous quarter, where the ratio was 2.93.

The trend in payables turnover ratios shows a general increase from Q4 2022 to Q1 2023, suggesting that Essential Utilities Inc was taking longer to pay off its accounts payable during this period. However, this trend reversed in subsequent quarters, with ratios generally decreasing, indicating that the company was improving its efficiency in paying its suppliers.

The highest payables turnover ratio in the provided data was in Q1 2023 at 4.05, while the lowest was in Q4 2023 at 1.59. This fluctuation in the ratio suggests variability in Essential Utilities Inc's payment practices over time.

Overall, it is essential for Essential Utilities Inc to monitor its payables turnover ratio consistently to ensure effective management of its accounts payable and to maintain strong relationships with its suppliers.