How to calculate days payable outstanding (DPO)?
Days of payables outstanding is a metric that reflects the average time (generally in days) that an organization will take to pay off its debt outstanding. Generally, a higher days payables outstanding ratio will indicate that it takes a company a longer amount of time to pay off its bills.
You might also be interested in...
-
What is the cash conversion cycle and how is the cash conversion cycle calculated?
The cash conversion cycle is a metric that is used to describe how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. The cash conversion cycle is considered a metric that expresses the length of time, in days, that is takes for a company […]
-
What does it mean if days payable outstanding increases?
Days payable outstanding (DPO) measures how many days it takes for a company to pay their outstanding invoices (accounts payable). If the company’s DPO increases, it likely means they are taking longer to pay outstanding invoices. A company could purposely delay the payment of invoices to increase cash available. Just be careful as you might […]