Updated 4 years ago by Darshan Patel

DPO is Days Payable Outstanding, an efficiency ratio that measures the average number of days a company takes to pay its suppliers. The calculation is carried out by dividing the accounts payable as shown in a company’s balance sheet by the amount of purchases per day. The latter is calculated by dividing the annual total cost of goods sold as set out in the company’s profit and loss account by 365 days.

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