A company's liquidity index is a measure of its ability to pay off debts. It looks at how many times in one year the average balance per account pays itself off, and it’s an important indicator for managing cash flow because when you have more frequent payments then this helps your business stay afloat during difficult economic periods where there may be fewer opportunities coming through with new customers or funding sources such as investors bidding on their investment opportunity by making higher offers than what was originally requested just so they can get access into that project early without having competition from other would-be competitors out bid them later down road! The formula is: Accounts payable turnover = Net Credit Purchases / Average accounts payable balance for period