Days payable outstanding (DPO) is an efficiency ratio that measures the average number of days a company takes to pay its suppliers. The formula is DPO = (ending AP)/(purchase per day), where ending AP is the accounts payable balance at the end of the accounting period being considered and purchase per day is calculated by dividing the total cost of goods sold per year by 365 days.
Days payable outstanding (DPO) is an efficiency ratio that measures the average number of days a company takes to pay its suppliers. The formula is DPO = (ending AP)/(purchase per day), where ending AP is the accounts payable balance at the end of the accounting period being considered and purchase per day is calculated by dividing the total cost of goods sold per year by 365 days.
Source: Wikipedia "Days payable outstanding" · CC BY-SA 4.0
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