Calculate Days Payable Outstanding (DPO) is a financial metric that provides an indication of how long it takes for a company to pay its suppliers. It is calculated by dividing the total accounts payable amount over a accounting period by the average daily purchases during the same period, then multiplying by the number of days in that period. For example, if a business incurs $100,000 in accounts payable over a 30-day period and spends an average of $5,000 a day on purchases, then their DPO would be 120 days ($100,000 / $5,000 x 30). This metric can provide insights into a company’s payment efficiency and cash flow management.