Definition of 'After-Tax Payable Period'
The average period that a company has between receiving goods and paying its suppliers for the goods, utilizing after-tax accounts payable and cost of sales values. The value is generally determined either quarterly or yearly, thereby substituting for N either 90 (for quarterly values) or 365 (for yearly values).
The payable period, or days payable, calculation is:
(average after-tax accounts payable / after tax cost of sales) * N number of days
|
