Payables Turnover
Short definition
Payables turnover is how many times trade payables are settled in a year. It is the inverse of DPO. Low turns mean long tenor — cash ease or supplier stress.
Detailed explanation
The base is purchases or COGS by policy. Reverse-factoring classification jumps the ratio.
Rising turns mean faster payment (a cash outflow); that can be deliberate to earn discounts.
Why it matters for the CFO
Supplier risk and the cash budget want this ratio read through DPO.
How it is calculated
Borç devir hızı = Alışlar / Ortalama ticari borç (= 365 / DPO)
Variables in the formula
- AP turns: Purchases / average payables
How to read it
Turns of 6.3× imply DPO ≈ 58 days. Bargaining power sets “normal”.
Numerical example
Purchases 250 mn TL, average AP 40 mn TL → turns = 6.25×. DPO = 365 / 6.25 ≈ 58 days.
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Definitions are educational. They are not investment, credit or tax advice.