Article Excerpt...
Days Payable Outstanding or DPO is the average number of days between the time the company receives an invoice and when the invoice is paid. DPO is typically calculated on a quarterly or annual basis. If a company has a DPO of 23 for its most recent quarter, that means it took 23 days on average to pay its suppliers during that time. DPO is a key cash-flow metric that indicates how well a company manages its cash outflows. A high DPO is often desirable because if a company takes longer to pay creditors, it has more cash available in the short term to use for other purposes.
Days Payable Outstanding or DPO is the average number of days between the time the company receives an invoice and when the invoice is paid. DPO is typically calculated on a quarterly or annual basis. If a company has a DPO of 23 for its most recent quarter, that means it took 23 days on average to pay its suppliers during that time. DPO is a key cash-flow metric that indicates how well a company manages its cash outflows. A high DPO is often desirable because if a company takes longer to pay creditors, it has more cash available in the short term to use for other purposes.
