Accounts Payable Turnover Ratio - Definition - Formula - Example - Analysis - Importance
Here we discuss about Accounts Payable Turnover Ratio. Previously we discuss about Accounts Receivable Turnover Ratio . You may also be interested in Accounts Payable Questions And Answers Accounts Payable Turnover Ratio Definition What is Accounts Payable Turnover Ratio Account Payable Turnover is the ratio of Net Credit Purchases To Average Accounts Payable. This ratio shows how much efficient a company is to pay its bills to Suppliers within the Current Accounting Period. The more ratio is, the more the ability of company is to pay off its bills within the specified Accounting Period. Whether this ratio is good or not it totally depends upon particular type of industry in which the company is operating its business. If the Ratio is decreasing From One Accounting Period to another, then it is a sign that the company fail to make prompt payment to suppliers due to lack of Cash . So, Investors and Creditors hesitate to invest or give credit to such company...