And the accounts payable turnover ratio shows how often a company pays off its creditors in a certain period. Payables are the amount a firm owes to its creditors and suppliers for the purchases made. The accounts payable turnover ratio is a short-term liquidity measure which quantifies the rate at which a firm pays off its payables. What is the Accounts Payable Turnover Ratio? Accounts payable are short-term debts for the firm for purchase of goods on credit basis, listed on the balance sheet under current liabilities.Ĭontinue reading to find out its meaning, formula, and interpretation with examples. It is also known as creditor’s turnover or payables turnover.
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