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Creditors Turnover Ratio

Creditors Turnover Ratio Assignment / Homework Help
This ratio indicates the speed with which trade creditors/suppliers are paid. A low turnover ratio reflects liberal credit terms granted by suppliers, while a high ratio indicates settlement to creditors rapidly

Creditors Turnover Ratio = Credit Purchases (in times)

Average Payment period = Average Creditors
Credit Purchases
x 365 (in days)

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