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 […]