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

Question

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A decrease in accounts payable turnover typically indicates that a company is taking longer to pay off its suppliers, not necessarily that suppliers are cutting off credit. It could be due to a variety of reasons such as cash flow management strategies or renegotiated payment terms.

If Accounts Payable Turnover Decreases, This Could Be an Indication