Days accounts payable (Days A/P),

Definition of Days accounts payable (Days A/P):

1. Money owed by a company to its creditors.

2. The average number of days a company 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 companys days accounts payable do not exceed 40 to 50 days. Also called days sales in payables. Formula: Average accounts payable x 365 ÷ cost of sales.

How to use Days accounts payable (Days A/P) in a sentence?

1. At last report, it had just $8.52 a share in total liabilities, mostly accounts payable.