Days in AP - Multi-Pedia

Days in Accounts Payable = Period Days / Accounts Payable Turnover.

This tells, on average, how long it takes to pay a bill. This is NOT a perfect analysis of the number of days in payables.

Measurement Average Acceptable Excellent
Days in Accounts Payable 28 ?? 25

If your number appears odd, check and make sure your Pass-Through EXPENSE is being included in the calculation.

AP Turnover The calculation is Total Operational Cost* (minus Pass-Through Revenue, Operational Salaries and Depreciation), divided by (Accounts Payable, Unvouchered AP, Accrued Contract IP Beds and Accrued Nursing Home R&B).

Measures how liquid AP is for the current year.

*Please note that Operational Costs do not include Extracurricular Programs, Interest or Development.

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