Days payables outstanding and Days payable outstanding: Difference between pages
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Days payable oustanding (DPO) is an efficiency ratio that measures the average number of days a company takes to get paid by its customers. |
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The formula for DPO is: |
The formula for DPO is: |
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Revision as of 18:01, 26 November 2009
Days payable oustanding (DPO) is an efficiency ratio that measures the average number of days a company takes to get paid by its customers.
The formula for DPO is:
where ending A/P is the accounts payable balance at the end of the accounting period being considered and COGS/day is calculated by dividing the total cost of goods sold per year by 365 days.[1]
See also
Notes
- ^ Berman, K., Knight, J., Case, J.: Financial Intelligence for Entrepreneurs, page 151. Harvard Business Press, 2008.