what is days payable outstanding dpo 
days payable outstanding dpo is a financial ratio that indicates the average time in days that a company takes to pay its bills and invoices to its trade creditors which may include suppliers vendors or financiers the ratio is typically calculated on a quarterly or annual basis and it indicates how well the company s cash outflows are being managed a company with a higher value of dpo takes longer to pay its bills which means that it can retain available funds for a longer duration allowing the company an opportunity to use those funds in a better way to maximize the benefits a high dpo however may also be a red flag indicating an inability to pay its bills on time investopedia joules garciaformula for days payable outstanding dpo dpo accounts payable number of dayscogswhere cogs cost of goods sold beginning inventory p ending inventoryp purchases begin aligned text dpo frac text accounts payable times text number of days text cogs textbf where text cogs text cost of goods sold qquad text beginning inventory text p text ending inventory text p text purchases end aligned dpo cogsaccounts payable number of days where cogs cost of goods sold beginning inventory p ending inventoryp purchases 