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Calculate DPO

oboloo Glossary

Calculate DPO

Calculate DPO is a metric used to measure the average number of days it takes a company to pay its suppliers. It is calculated by dividing the total amount of accounts payable by the total cost of goods sold (COGS) for a given period, and then multiplying the result by the number of days in the period. Calculate DPO is an important metric for businesses to track, as it provides insight into the company’s financial health and cash flow. A high Calculate DPO indicates that the company is taking longer to pay its suppliers, which can be a sign of financial distress. On the other hand, a low Calculate DPO indicates that the company is paying its suppliers quickly, which can be a sign of financial stability. Companies should strive to maintain a low Calculate DPO, as it is an important indicator of financial health.

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