Accounts Payable Turnover

Accounts Payable Turnover is a financial metric used to measure a company's efficiency in paying its suppliers and vendors. It is calculated by dividing the total cost of goods or services purchased on credit during a specific period by the average accounts payable balance during that same period. The formula is:

Accounts Payable Turnover = Total Cost of Goods Purchased / Average Accounts Payable Balance

A high accounts payable turnover ratio indicates that the company is quickly paying off its bills, while a low ratio suggests that the company is taking its time to pay its accounts payable. Typically, a higher accounts payable turnover ratio is considered favorable because it reflects a company's ability to manage its cash flow and maintain good relationships with its suppliers. However, a very high ratio may indicate that a company is not taking advantage of favorable credit terms or is not purchasing enough goods or services on credit.

Additional Details

Metric Name	Type	Default Period Type
ap_turnover	fin_metric	FY

Formatting Details

Data Format	Display Format	Unit
float	number	float