An excessively high average payable period ratio indicates the possibility of the presence of a significant amount of past-due accounts payable.

Question

Quizplus · Accepted Answer

An excessively high average payable period ratio means that a company is taking too long to pay off its suppliers, which may indicate that they have a significant amount of past-due accounts payable. This can put a strain on the business's relationship with its suppliers and affect its creditworthiness.

An Excessively High Average Payable Period Ratio Indicates the Possibility