Accounts Payable Turnover
Number
How often a company pays off its suppliers relative to the amount of credit extended, often annually. Indicates how efficiently a company is paying its suppliers.
Formula
Cost of Goods Sold (COGS) / Average Accounts Payable
Example
If annual COGS is $500,000 and average accounts payable is $50,000, the turnover rate is 10 times/year.