Accounts Payables Turnover Ratio
Calculate the accounts payable turnover ratio, an efficiency ratio that measures how quickly a company pays its suppliers.
The accounts payable turnover ratio indicates how many times, on average, a company pays off its accounts payable during a specific period. A higher turnover ratio means the company pays its suppliers more quickly, which can reflect short payment terms or ample cash but ties up working capital. A lower ratio means it takes longer to pay and finances part of its working capital with supplier credit; a ratio that keeps falling can also signal payment difficulties.
The formula is as follows:
\[\text{Accounts Payable Turnover Ratio} = \text{Cost of Goods Sold} / \text{Average Accounts Payable}\]Also known as: payables efficiency, AP turnover.
Accounts Payables Turnover Ratio in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_accounts_payables_turnover_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["PG", "CL", "KMB"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_accounts_payables_turnover_ratio()
Or, after setting up the Finance Toolkit MCP, ask:
How many times a year did Procter & Gamble, Colgate-Palmolive and Kimberly-Clark pay off their suppliers from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| CL | 4.9638 | 5.1597 | 5.0514 | 4.5647 | 4.1762 |
| KMB | 3.7492 | 3.6472 | 3.5893 | 3.4957 | 3.1215 |
| PG | 2.8776 | 2.9478 | 2.9009 | 2.7267 | 2.6912 |
Parameters
get_accounts_payables_turnover_ratio accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |