Q » Explain payable turnover ratio.

06 Dec, 2025

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A » The payable turnover ratio measures how efficiently a company pays off its suppliers over a specific period. Calculated by dividing net credit purchases by average accounts payable, this ratio indicates the number of times a company pays its creditors annually. A higher ratio suggests efficient payment management, while a lower ratio may indicate potential liquidity issues or delayed payments affecting supplier relationships.

Michael

06 Dec, 2025

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A »The payable turnover ratio measures a company's efficiency in paying its suppliers. It's calculated by dividing total purchases by average accounts payable. A higher ratio indicates faster payment, while a lower ratio suggests slower payment. This metric helps assess a company's liquidity and cash management.

David

06 Dec, 2025

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