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Accounts Payable Turnover Ratio Calculator

Calculate the accounts payable turnover ratio from supplier purchases and average accounts payable, and convert it to days payable outstanding — how many days a business takes to pay its suppliers.

Purchases from suppliers (or COGS)

Accounts payable at the start

Accounts payable at the end

Days in the period

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How it works

Average accounts payable = (beginning AP + ending AP) ÷ 2 · AP turnover = purchases (or COGS) ÷ average AP · DPO = days in period ÷ AP turnover

The accounts payable turnover ratio shows how many times a business pays off its average supplier balance in a period. A high ratio means suppliers are paid quickly; a low ratio means the company takes longer, which keeps cash in the business but can strain supplier relationships or signal cash pressure. Analysts often use cost of goods sold when credit purchases are not reported, so compare companies using the same numerator. DPO is a component of the cash conversion cycle.

Worked example

With $600,000 of purchases and accounts payable of $70,000 at the start and $80,000 at the end, average AP is $75,000.00 and the turnover ratio is 600,000 ÷ 75,000 = 8.00×. The business pays suppliers about every 365 ÷ 8 = 45.6 days.

Sources: Corporate Finance Institute — Accounts payable turnover ratio · Wikipedia — Days payable outstanding

Frequently asked questions

How do you calculate accounts payable turnover?

Divide total supplier purchases (or cost of goods sold) for the period by average accounts payable, which is beginning plus ending AP divided by 2. $600,000 ÷ $75,000 = 8 times a year.

Is a high or low AP turnover better?

Neither is always better. A high ratio shows prompt payment and good credit standing but uses cash sooner; a low ratio preserves cash but may mean late payments. Compare it with your supplier terms (for example net 30 or net 60) and industry peers.

How do I convert AP turnover to days?

Divide the number of days in the period by the ratio. A turnover of 8 over 365 days equals about 45.6 days payable outstanding.

Should I use purchases or COGS?

Credit purchases from suppliers is the precise numerator. When it is not available — as in most published accounts — COGS is used as a proxy. Be consistent when comparing periods or companies.

Related calculators

Days Payable Outstanding Calculator

Calculate DPO — the average number of days your business takes to pay its suppliers, from accounts payable and cost of goods.

Accounts Receivable Turnover Calculator

Calculate accounts receivable turnover from net credit sales and average receivables, plus days sales outstanding (DSO) — how fast you collect.

Cash Conversion Cycle Calculator

Combine days inventory, days sales and days payable outstanding into the cash conversion cycle — how long cash is tied up.

Inventory Turnover Calculator

Calculate inventory turnover from COGS and average inventory, plus days inventory outstanding — how many days of stock you hold.

Cost of Trade Credit Calculator

Find the annual cost of skipping an early-payment discount such as 2/10 net 30 — nominal and effective rate, the discount you give up and whether to borrow to pay early.

Planning estimate only. Real results depend on your actual costs, prices, taxes and market — check the figures with your accountant or adviser before making business decisions.