AP Turnover Model

Accounts payable turnover is a simple metric with something important to say. Calculated by dividing all purchases from suppliers over a measurement period by the average time for accounts payable over that same period, this ratio tells you how quickly your company is settling its debts. If the ratio is falling, it indicates you're paying faster, possibly because of smaller payment windows or early repayment incentives. If the ratio is climbing, it indicates you're paying slower, potentially because of worsening financial conditions. No matter which way the ratio is trending, however, you n ... Read More

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