DPO
Average number of days a business takes to pay its suppliers.
What is DPO?
DPO (Days Payable Outstanding) measures how long, on average, a business takes to pay its suppliers after receiving goods or services on credit. It is calculated as accounts payable divided by cost of goods sold, multiplied by the number of days in the period. A higher DPO means the business holds onto its cash longer, though stretching it too far can strain supplier relationships.