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- DPO = Days Payable Outstanding
Defination / Uses
DPO calculator ( Days Payable Outstanding), you can easy calculate how long it takes for a company to pay its bills. This metric will help you to anatomize the effectiveness of the company in question.
When assaying a company's effectiveness in its operation, it's important to consider its working capital. Having a high DPO basically means that the company can pay its bills and scores to its supplier slower, hence retaining the company's cash for other exercises. It can ameliorate the company's working capital position.
DPO plays an important part in understanding how effectively a company is being run. Still, as DPO can only tell you how the company manages its outstanding charges, which is a small part of the whole story.