Accounts Payable Turnover

Accounts Payable Turnover, often referred to as payable turnover, is a financial metric that quantifies how efficiently a company pays off its suppliers over a specific period. It is calculated by dividing the total supplier purchases by the average accounts payable during the same period. A higher turnover ratio indicates prompt payment to suppliers, reflecting strong liquidity and operational efficiency. Conversely, a lower ratio may suggest cash flow issues or extended payment terms.