Accounts Receivable Turnover Ratio VS Accounts Payable Turnover Ratio In Tabular Form

Here we discuss the difference between Accounts Receivable Turnover Ratio And Accounts Payable Ratio in tabular form.

Difference Between Accounts Receivable Turnover Ratio / Debtors Turnover Ratio

VS

Accounts Payable Turnover Ratio / Creditors Turnover Ratio

Differences	Accounts Receivable Turnover	Accounts Payable Turnover
Formula	It is the ratio of Cost Of Sales To Average Accounts Receivable     Or     It is the ratio of Net Credit Sales To Average Accounts Receivable	is the ratio of Cost of Sales to Average Accounts Payable     Or     It is the ratio of Net Credit Purchases To Average Accounts Payable
Measurement	It measures the Efficiency of Management in Collecting Short-Term Debts From Customers.	While, this Ratio shows the efficiency of Management in paying the short-term debts to Suppliers.
Investors	Investors are encouraged to invest in the business of the company where Accounts Receivable Turnover Ratio is Good as the company has Cash for giving return on Investment.	Investors are encouraged to investment in the company because if the ratio is good it shows that the company can easily meet short-term obligations of the business and main its Working Capital.
Nature	From The Point of Business, this ratio shows that how well the company is managing its Accounts Receivable (Current Asset).	It shows whether the company is properly managing its Accounts Payable (Current Liability) or not.

  

  

So both Accounts Receivable Turnover Ratio and Accounts Payable Turnover ratio measure the efficiency of management of the company either in collecting shorter-Term debts or paying shorter-term debts of the business and it is the main and fundamental difference between these two terms.