DPO (Days Payable Outstanding)
The average number of days a company takes to pay its suppliers — a measure of how effectively payables are managed as a source of working capital funding.
Also known as: Days Payable Outstanding, Creditor days, Payable days
One-line definition
DPO measures how long a company holds on to supplier cash before paying — higher DPO means more supplier-funded working capital.
Formula
DPO = (Trade payables ÷ Cost of goods sold) × 365
TS watch-out
Artificially high DPO at period-end (stretching payables) flatters NWC at the measurement date. TS teams look for seasonality in payables and payment term changes that signal manipulation.
Related terms
Net Working Capital (NWC / WCR)
Net Working Capital (NWC), also called Working Capital Requirement (WCR) — the normalised working capital a target needs to operate, and a direct lever on the M&A purchase price.
DSO (Days Sales Outstanding)
The average number of days it takes a company to collect payment after a sale has been made — a key working capital metric.
DIO (Days Inventory Outstanding)
The average number of days a company holds inventory before selling it — a measure of inventory efficiency and supply chain management.
Cash Conversion Cycle
The time (in days) it takes a company to convert its investments in inventory and other resources into cash from sales.