Accounts Payable Turnover
Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.
What is Accounts Payable Turnover?
Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.
Here’s how to calculate accounts payable turnover:
Accounts payable turnover = total purchases on credit/[(beginning accounts payable + ending accounts payable)/2]
