Accounts Payable Turnover (TTM)
factor.formula
Accounts Payable Turnover (TTM):
Average accounts payable:
Among them, Cost of Goods Sold (TTM) represents the operating cost (or sales cost) of the most recent 12 months, Beginning Accounts Payable and Ending Accounts Payable represent the accounts payable at the beginning and end of the period respectively. Average accounts payable is the arithmetic average of the accounts payable at the beginning and end of the period, which is used to represent the average level of accounts payable during the period.
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Operating costs (or sales costs) for the last 12 months, reflecting the direct costs incurred by the company to generate sales revenue
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Accounts payable balance at the beginning of the reporting period
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Accounts payable balance at the end of the reporting period
factor.explanation
Accounts payable turnover (TTM) is a key indicator to measure the operating efficiency of an enterprise. It reflects the ability of an enterprise to manage accounts payable. Specifically, this indicator reflects the strategy and ability of an enterprise to use supplier credit and its own capital turnover. A higher accounts payable turnover rate usually means that the enterprise can repay the supplier's payment in a shorter period of time. This may be because the enterprise has sufficient cash flow, weak bargaining power, or tends to settle as soon as possible to reduce credit risk; a lower accounts payable turnover rate indicates that the enterprise may have strong bargaining power in the industrial chain and can occupy the supplier's funds for a longer period of time, but this may also mean that the enterprise has potential short-term debt repayment pressure. Therefore, when analyzing the accounts payable turnover rate, it is necessary to conduct a comprehensive assessment based on the characteristics of the industry, the company's own situation, and the upstream and downstream industrial chain relationships.