Cash & working capital
DPO (Days Payable Outstanding)
Formula reviewed by Tahir Asif, CMA
The average number of days a business takes to pay its own suppliers.
DPO measures how long, on average, a business holds cash before paying accounts payable. A higher DPO keeps cash on hand longer, which helps cash position — up to the point where stretching payments too far damages supplier relationships or forfeits early-payment discounts.
DPO is the mirror image of DSO from the supplier's perspective: a business's DPO is effectively part of its suppliers' DSO.
DPO
Accounts payable ÷ (COGS ÷ Days in period)
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