The Accounts Payable Turnover KPI measures the rate at which your company pays off suppliers and other expenses. This ratio is important for understanding the amount of cash that your business spends on suppliers during any given period. It shows how many times over the course of the year your business is able to pay off its accounts payable. Used in conjunction with Current Ratio or Quick Ratio, this financial metric shows your ability to meet your financial obligations.
Total Supplied Purchases / Average Accounts Payable