Days payable outstanding is a great measure of how much time a company takes to pay off its vendors and suppliers.
The formula shows that days payable outstanding analysis is calculated by dividing the.
Days payable outstanding is an important efficiency ratio that measures the average number of days it takes a company to pay back suppliers.
This metric is used in cash cycle analysis.
A high or low dpo.
Days payable outstanding (dpo) measures the average time it takes a company to pay its outstanding bills.
Below are two common ways to calculate dpo.
The first method is typically used by companies.