If Accounts Payable Turnover Decreases, This Could Be an Indication

question 91

True/False

If accounts payable turnover decreases, this could be an indication that suppliers are cutting off credit to the company.

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Definitions:

Return On Equity

A measure of a company's profitability, calculated by dividing net income by shareholder equity.

Du Pont Identity Method

The Du Pont Identity Method is a financial analysis framework that breaks down a company's return on equity into three parts: profitability, asset efficiency, and financial leverage.

Total Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue; calculated by dividing sales revenue by total assets.