How is DPO calculated?

DPO is calculated using the formula: \( DPO = \frac{\text{Average Accounts Payable}}{\text{Cost of Goods Sold}} \times 365 \).

Days of Payables Outstanding (DPO) Calculator

Q: What is Days of Payables Outstanding (DPO)?

Days of Payables Outstanding (DPO) is a financial metric that indicates the average number of days a company takes to pay its suppliers.

This calculator helps you determine the Days of Payables Outstanding (DPO) to effectively manage your working capital. It is designed for finance professionals seeking to optimize payment cycles.

DPO Calculator

Average Accounts Payable *

Cost of Goods Sold (COGS) *

Results

Days of Payables Outstanding (DPO): 0 days

Data Source and Methodology

All calculations are based on standard accounting principles. Accurate data is essential for precise calculations.

The Formula Explained

\\( DPO = \\frac{\\text{Average Accounts Payable}}{\\text{Cost of Goods Sold}} \\times 365 \\)

Glossary of Terms

Average Accounts Payable: The average amount owed to suppliers during a period.
Cost of Goods Sold (COGS): The direct costs attributable to the production of goods sold by a company.

Frequently Asked Questions (FAQ)

What is Days of Payables Outstanding (DPO)?

DPO is a financial metric that indicates the average number of days a company takes to pay its suppliers.

Why is DPO important?

DPO is crucial for assessing the efficiency of a company's cash flow management and its financial health.

Tool developed by Ugo Candido. Content reviewed by experts.
Last reviewed for accuracy on: October 2023.