How To Calculate Accounts Payable Turnover in Oracle | Arithmix

Calculating accounts payable turnover is an important financial metric that can help businesses understand their financial health and cash flow. While there are many different ways to calculate accounts payable turnover, using Oracle can make the process much easier and more accurate. In this article, we'll walk you through the steps to calculate accounts payable turnover in Oracle, as well as explain what accounts payable turnover is and when it's valuable to calculate.

What Is Accounts Payable Turnover?

Accounts payable turnover is a financial ratio that measures how quickly a business pays off its suppliers and vendors. It's calculated by dividing the total amount of purchases made on credit by the average accounts payable balance during a given period. This ratio is important because it can help businesses understand how efficiently they're managing their cash flow and how quickly they're paying off their debts.

For example, if a business has an accounts payable turnover ratio of 10, it means that they're paying off their suppliers 10 times per year, or roughly every 36.5 days. A higher accounts payable turnover ratio is generally seen as a positive sign, as it indicates that a business is paying off its debts quickly and efficiently.

When Is It Valuable To Calculate Accounts Payable Turnover?

Calculating accounts payable turnover can be valuable for businesses in a number of different situations. For example, if a business is looking to improve its cash flow, understanding its accounts payable turnover ratio can help them identify areas where they can make changes to pay off debts more quickly. Additionally, if a business is considering taking on new debt or seeking financing, having a strong accounts payable turnover ratio can help them demonstrate their financial health and ability to manage their debts.

Overall, calculating accounts payable turnover is an important financial metric that can help businesses understand their cash flow and financial health. By using Oracle to calculate this ratio, businesses can ensure that their calculations are accurate and up-to-date, allowing them to make informed decisions about their finances.

How Do You Calculate Accounts Payable Turnover in Oracle

Oracle itself isn’t naturally geared towards letting you calculate complex metrics like Accounts Payable Turnover. As an alternative, teams typically use products like Arithmix to import data from Oracle and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Oracle, combine it with data from other systems, and create calculations like Accounts Payable Turnover.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Accounts Payable Turnover in Arithmix

Calculating metrics like Accounts Payable Turnover is simple in Arithmix. Once you've created your free account, you’ll be able to import your Oracle data, and use it to create natural language formulas for metrics like Accounts Payable Turnover.

Arithmix is designed to give you the power to build any calculations you want on top of your Oracle data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.