However a very favorable ratio to this effect also shows that the business is not taking the full advantage of credit facilities allowed by the creditors. The companys current value of Net Income is estimated at 54.84 Billion. Apple Net Income is relatively stable at the moment as compared to the past year. This situation enhances the credit worthiness of the company. During the period from 2010 to 2022, Apple Accounts Payable Turnover yarly data series regression line had median of 6.67 and sample variance of 0.90.
To know whether this is a high or low ratio, compare it to other companies within the same industry. This means that Company A paid its suppliers roughly five times in the fiscal year. A high creditors turnover ratio or a lower credit period ratio signifies that the creditors are being paid promptly. Accounts payable turnover ratio 10 million / ((1.6 million + 2.2 million) / 2) So, the accounts payable turnover ratio would be: 5.26. Find Accounts payable turnover stock images in HD and millions of other royalty-free stock photos, illustrations and vectors in the Shutterstock collection. The average payment period ratio represents the number of days by the firm to pay its creditors. (In case information about credit purchase is not available total purchases may be assumed to be credit purchase.) Significance of the Ratio: of working days in a yearĪverage Payment Period = (Trade Creditors × No. Payment requirements usually will vary from supplier to supplier, depending on its size and financial capabilities. This aids investors in understanding liquidity since suppliers often require payment within 30-90 days. It can be calculated using the following formula:Īverage Payment Period = Trade Creditors / Average Daily Credit PurchaseĪverage Daily Credit Purchase= Credit Purchase / No. The accounts payable turnover ratio can determine the short-term liquidity of a business. Average payment period ratio gives the average credit period enjoyed from the creditors.
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