This accounts payable turnover Excel template lets you quickly calculate the accounts payable turnover ratio and measure the number of times a company pays its suppliers in one year.
Accounts payable turnover ratio is a financial ratio of the net credit purchases of a business to its average accounts payable for one year. Accounts payable turnover is simply the number of times a company pays its suppliers in one year.
It can also be used to evaluate how fast or slow a company is paying off its suppliers. Accounts payable turnover is sometimes referred to as the creditor’s velocity or creditor’s turnover ratio. The amounts from average accounts payable and the number of times suppliers are paid a good measure of the short term liquidity of a business.
How to Use the Excel Spreadsheet
This is a model for beginners to learn how the A/P turnover ratio works. Simply input the following information:
- The net credit sales for the period
- The amount of product returns for the period
- Accounts payable at the beginning of the period
- Accounts payable at the end of the period
- The number of days in a period (usually 365)
The template will then calculate the accounts payable turnover ratio and show you the payable turnover in days value as well.
You can find out more about the accounts payable turnover ratio, including more detailed examples, in our lesson here: