Formula
to calculate average obligation period:
Average
Obligation Period = accounts payable / average daily
purchases.
Average
obligation period definition and explantion:
The
average obligation period
ratio measures the extent to which accounts payable
represents current obligations (rather than overdue
ones).
The average obligation period ratio is included in the
the financial statement ratio analysis spreadsheets
highlighted in the left column, which provide
formulas, definitions, calculation, charts and
explanations of each ratio.
The average obligation period is listed in our efficiency
ratios.
The average obligation
period ratio and other ratios are key
to understanding financial statements. Our
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Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
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analysis spreadsheets which are not highlighted in the
left column, to see which other ratios our spreadsheets
calculate, define and explain.
The average obligation
period may be included in our
custom 1, 3 or 5 period financial
statement ratio analysis spreadsheet.
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