DAYS PAYABLE OUTSTANDING Definition

Bookmark and Share

DAYS PAYABLE OUTSTANDING (DPO) is an estimate of the length of time the company takes to pay its vendors after receiving inventory. If the firm receives favorable terms from suppliers, it has the net effect of providing the firm with free financing. If terms are reduced and the company is forced to pay at the time of receipt of goods, it reduces financing by the trade and increases the firms working capital requirements. It is calculated: Days Payable Outstanding = 365 / Payables Turnover (Payables Turnover = Purchases / Payables).

Learn new Accounting Terms

AUKSINAS (AUKSINU, AUKSINAI) is the currency of Lithuania.

PIASTRE is a currency of Cambodia, Laos, Vietnam, Egypt, and Sudan.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.