Accounts payable turnover days is a measure of how long it takes a company to pay its suppliers for the goods and services it buys on credit. It shows the average number of days that a company’s accounts payable balance remains unpaid in a given period. A lower number means the company pays its suppliers faster, which can indicate good cash flow and creditworthiness. A higher number means the company takes longer to pay its suppliers, which can indicate cash flow problems or favorable credit terms. The formula for accounts payable turnover days is:
Accounts payable turnover days = 365 / Accounts payable turnover
Where:
- Accounts payable turnover is R0063,
accounts_payable_turnover