Question

What is Trade Payables Turnover Ratio?

Answer 1

The Trade Payables Turnover Ratio determines how efficiently a firm pays off its trade debtors or suppliers. It displays how many times a corporation settles its accounts payable (trade payables) over a given time period, which is usually a year.

The formula for the Trade Payables Turnover Ratio is:

Trade Payables Turnover Ratio = `("Net Credit Purchases")/("Average Creditors + Average B/P")`