The Creditors Turnover Ratio is a financial metric used to measure the rate at which a company pays off its creditors. It is calculated by dividing the total amount of credit purchases during a given period of time by the average amount of accounts payable during the same period. This ratio is used to measure the efficiency of a company’s credit management and is a key indicator of the company’s financial health. It is important to note that a high Creditors Turnover Ratio is generally seen as a good sign, as it indicates that the company is paying its creditors in a timely manner. Conversely, a low Creditors Turnover Ratio may be a sign of poor credit management and could be a warning sign of potential financial distress. This ratio is also a useful tool for creditors when evaluating a company’s creditworthiness, as it provides insight into the company’s ability to pay its bills on time. Ultimately, the Creditors Turnover Ratio is an important metric for businesses to monitor and manage in order to ensure their financial health and creditworthiness.