Accounts Payable Turnover Ratio
Ratio for Account Payable Turnover is as Follow:
Creditors/accounts payable turnover = Annual credit purchases /Average creditors
- The firm buy goods on credit from suppliers.
- The ratio signify number of times p.a. the firm bought goods upon credit after paying the suppliers.
- If the creditors turnover is high, this signifies such the payment was made
- Contained via a short period of time.