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The accounts payable turnover ratio shows investors how many times per period a company pays its accounts payable. In other words, the ratio measures the speed at which a...
The accounts payable turnover ratio is a liquidity ratio that measures how many times a company is able to pay its creditors over a period of time. A high ratio may be due to suppliers demanding fast payments or the company taking advantage of early payment discounts.
The accounts payable turnover ratio measures how quickly a business makes payments to creditors and suppliers that extend lines of credit. Accounting professionals quantify the ratio by calculating the average number of times the company pays its AP balances during a specified time period.
The accounts payable turnover, or “payables turnover”, is a ratio used to evaluate how quickly a company repaid those that offered them a line of credit, i.e. the frequency at which a company pays off its accounts payable balance.
Accounts payable turnover ratio is a measure of your business’s liquidity, or ability to pay its debts. The higher the accounts payable turnover ratio, the quicker your...
Accounts payable turnover is a ratio that measures the speed with which a company pays its suppliers. If the turnover ratio declines from one period to the next, this indicates that the company is paying its suppliers more slowly, and may be an indicator of worsening financial condition.
The accounts payable turnover ratio tells you how quickly you’re paying vendors that have extended credit to your business. The keys are to calculate the ratio on a periodic basis to identify trends and compare your ratio to the industry standard.
The accounts payable turnover ratio, or simply the payable turnover, is a liquidity ratio that shows a company's ability to pay off its accounts payable by comparing net credit purchases to the average accounts payable during a period.
So what does accounts payable turnover mean? If you discover that a business has a payable turnover ratio of 6, for example, it means the company you’re evaluating pays off its average supplier balance owing 6 times a year, or about every 60 days.
Accounts payable turnover ratio, or AP turnover ratio, is a measure of how many times a company pays off AP during a period. It gives insight into the short-term liquidity of a company. Simply, the AP turnover ratio gives a measure of the rate suppliers/vendors are paid off.