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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.


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  • 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 to convert inputs into cash flows. The cash conversion cycle is computed as follows:

  • 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 upset your vendors!