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.

Days Payable Outstanding Special Interest Group

Special Interest Group (6 members)

Days Payable Outstanding Forum  

Recent topics

  Quotes on Paying Creditors. Quotations
Hi, do you know of a remarkable, humorous quote by a famous person or a proverb related to how creditors are or should be paid?
Please enter a reac...

Best Practices - Days Payable Outstanding

Expert Tips - Days Payable Outstanding

Advance yourself in business administration and management

Resources - Days Payable Outstanding

Financial Statement Analysis | Ratio 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


Accelerate your management career

Special Interest Group Leader


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
2018 12manage - The Executive Fast Track. V15.0 - Last updated: 11-12-2018. All names of their owners.