oboloo Glossary

Account Payable Turnover Ratio

oboloo Glossary

Account Payable Turnover Ratio

Account payable turnover ratio is a measure of how many times a business turns over its accounts payable in relation to its net income. It’s expressed as the number of times the working capital is turned over in one year.

Where Net Income represents the total amount of revenue and costs relating to operations that produce profit, which is not to be confused with gross income, and COGS represents the cost of goods sold, which are all expenses incurred during the production of revenue-generating goods or services. Accounts Payable represents all amounts owed by a business.