Accounts payable (A/P) to total debt ratio

Accounts payable (A/P) to total debt ratio,

Definition of Accounts payable (A/P) to total debt ratio:

  1. Relationship between unpaid suppliers bills and the firms total debt in an accounting period. It is considered high if it is 0.5 or above, and may suggest that the firm needs to borrow additional sums to avoid problems with suppliers. Formula: Total accounts payable ÷ Total debt.

Meaning of Accounts payable (A/P) to total debt ratio & Accounts payable (A/P) to total debt ratio Definition