Days payable outstanding (DPO) is a financial ratio that indicates the average time (in days) that a company takes to pay its bills and invoices to its trade creditors, which may include suppliers, vendors, or financiers. As such, DPO is an important consideration when it comes to managing a company’s accounts payable – in other words, the amount owed to creditors and suppliers. The ratio is typically calculated on a quarterly or annual basis, and It is a key indicator of the financial health of a business and its ability to meet its short-term obligations.

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What is Days Sales Outstanding?