Financial Statement Analysis Magazine Section

Ratio - Accounts Payable to Sales

Accounts payable to sales ratioACCOUNTS PAYABLE TO SALES (%):                                                                           onlinecalculator iconOnline Accounts Payable to Sales Ratio Calculator

This ratio is obtained by dividing the 'Accounts Payable' of a company by its 'Annual Net Sales'. This ratio gives you an indication as to how much of their suppliers money does this company use in order to fund its Sales. Higher the ratio means that the company is using its suppliers as a source of cheap financing. The working capital of such companies could be funded by their suppliers.

The formula:

Accounts Payable to Sales Ratio = [Accounts Payable / Net Sales ] x 100

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