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Days Payable Outstanding (DPO)

What is 'Days Payable Outstanding - DPO'

Days payable outstanding (DPO) is a company's average payable period. Days payable outstanding tells how long it takes a company to pay its invoices from trade creditors, such as suppliers. DPO is typically looked at either quarterly or yearly.

Explaining 'Days Payable Outstanding - DPO'

Companies must strike a delicate balance with DPO. The longer they take to pay their creditors, the more money the company has on hand, which is good for working capital and free cash flow. But if the company takes too long to pay its creditors, the creditors will be unhappy. They may refuse to extend credit in the future, or they may offer less favorable terms. Also, because some creditors give companies a discount for timely payments, the company may be paying more than it needs to for its supplies. If cash is tight, however, the cost of increasing DPO may be less than the cost of foregoing that cash earlier and having to borrow the shortfall to continue operations.


Further Reading


Receivables management: The importance of financial indicators in assessing the creditworthiness
yadda.icm.edu.pl [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …

Accrual Duration and Financial Statement ErrorsAccrual Duration and Financial Statement Errors
papers.ssrn.com [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …

Effects of working capital management on firms' profitability: evidence from cheese‐producing companiesEffects of working capital management on firms' profitability: evidence from cheese‐producing companies
onlinelibrary.wiley.com [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …

Impact of working capital management on business profitability: Evidence from the Polish dairy industryImpact of working capital management on business profitability: Evidence from the Polish dairy industry
www.agriculturejournals.cz [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …

Design of an efficient strategy for optimization of payment induced by a rational supply chain process: a prerequisite for maintaining a satisfactory level of working …Design of an efficient strategy for optimization of payment induced by a rational supply chain process: a prerequisite for maintaining a satisfactory level of working …
www.sciencedirect.com [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …

Trade credit in the UK economy (1998–2012): An exploratory analysis of company accountsTrade credit in the UK economy (1998–2012): An exploratory analysis of company accounts
papers.ssrn.com [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …

Evidence for using the cash conversion cycle to test the relationship with the corporate profitability: an empirical analysis on a sample of textile Italian SMEsEvidence for using the cash conversion cycle to test the relationship with the corporate profitability: an empirical analysis on a sample of textile Italian SMEs
www.inderscienceonline.com [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …

Working capital management: Financial and valuation impactsWorking capital management: Financial and valuation impacts
www.sciencedirect.com [PDF]
… client with a higher amount of trade receivables and trade payables does not … outstanding, we confirmed moderate correlation between days sales outstanding and days payable outstanding (0.312) … K., Csikosova A., Janoskova M., 2015, Develompent of Risk Payment Index in …


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