days accounts payable (Days A/P) definition

days accounts payable (Days A/P)

Average number of days a firm takes to pay its bills, used as a measure of how much it depends on trade credit for short-term financing. As a rule of thumb, a well managed firm's days A/P do not exceed 40 to 50 days. Also called days sales In payables. Formula: Average accounts payable x 365 ÷ cost of sales.

days accounts payable (Days A/P) is in the Accounting & Auditing and Banking, Commerce & Finance subjects.

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