Dpo Days Payable Outstanding (DPO) is a financial metric that measures the average number of days that a company takes to pay its invoices from trade creditors. It is a measure of how quickly a company pays its bills and is a key indicator of its financial health. The higher the DPO, the longer it takes the company to pay its bills, which can lead to cash flow problems. A lower DPO, on the other hand, indicates that the company is paying its bills on time and has a healthy cash flow.
The official business definition of DPO is the number of days it takes a company to pay off its creditors from the time of purchase. It is calculated by dividing the total accounts payable of the company by the total cost of goods purchased for the period, then multiplying by the number of days in the period. For example, if a