what does accounts payable turnover tell you
Your accounts payable turnover is the rate you pay your bills. You can calculate your accounts payable turnover by dividing the total cost of sales by the average balance in accounts payable. The turnover tells you how many times in a period you pay your average accounts payable balance. If you have total supplier purchases of $100,000 for the year and an average accounts payable balance of $5,000, your accounts payable turnover is 20. You can also divide the number of days in a period by your accounts payable turnover to find out the number of days your payables were outstanding.