Days Payable Outstanding (DPO)

Knowledge Center


Description of Days Payable Outstanding. Explanation.


Days Payable Outstanding (DPO)

Definition Days Payable Outstanding (DPO). Description

Days Payable Outstanding (DPO) is a financial performance ratio, which indicates how long a company is taking on average to pay its trade creditors.

Although the average DPO varies from one industry and region to another, a low DPO number shows that a company is paying its liabilities to suppliers quickly, whereas a high DPO number indicates that a company is receiving longer (and better) credit terms from its suppliers.

However, it should be noted that a high DPO number may also be a sign of liquidity problems of a company and therefore should always be challenged.

Calculation of Days Payable Outstanding. Formula

The DPO ratio is calculated as follows:

DPO = (Accounts Payable / Cost of Goods Sold in Accounting Period) x Days in Accounting Period


In this formula, the days in accounting period are typically 90 days for quarterly statements or 365 days for yearly statements.

DPO forms one part of the Cash Conversion Cycle, which represents the length of time that it takes a company to convert resource inputs into cash flows.

Days Payable Outstanding (DPO) is also known as Days Purchase Outstanding.

Special Interest Group - Days Payable Outstanding

Special Interest Group (6 members)

Forum - Days Payable Outstanding  

In the forum section you will find recent discussions within this knowledge area.

  Quotes on Paying Creditors. Quotations (1 reactions)
Hi, do you know of a remarkable, humorous quote by a famous ...

Best Practices - Days Payable Outstanding

In the best practices section you will find the best forum discussions within this knowledge area.

Expert Tips - Days Payable Outstanding

In the expert tips section you will find advices from experts within this knowledge area.

Resources - Days Payable Outstanding

In the Resources section you will find powerpoint presentations, micro-learning videos, articles, news items, etc. within this knowledge area.

Financial Statement Analysis | Ratio Analysis

Ratio Analysis, Finanical Statement Analysis...

News about Days Payable Outstanding


Videos about Days Payable Outstanding


Presentations about Days Payable Outstanding


Books about Days Payable Outstanding


More about Days Payable Outstanding

Special Interest Group Leader

You here? Sign up for free


Return to Management Hub: Finance & Investing

More on Management  |  Return to Management Dictionary  | 


This ends our Days Payable Outstanding (DPO) summary and forum.

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2019 12manage - The Executive Fast Track. V15.0 - Last updated: 25-6-2019. All names of their owners.