Find out the days payable outstanding for Company Comic. It has an ending account payable of $30,000.
Days Payable Outstanding Example Example #1Ĭompany Comic has a reputation for paying its vendors quickly. We will now look at a practical example to illustrate this. The formula shows that DPO is calculated by dividing the total (ending or average) accounts payable by the money paid per day (or per quarter or month).įor example, if a company has a DPO of 40 days, that means the company takes around 40 days to pay off its suppliers or vendors on average.Īlso, you can have a look at this detailed guide to Accounts Payable.
Source: Days Payable Outstanding () Days Payable Outstanding Formulaĭays Payable Outstanding Formula = Accounts Payable / (Cost of Sales / Number of Days)ĭays payable outstanding is a great measure of how much time a company takes to pay off its vendors and suppliers. You are free to use this image on your website, templates, etc., Please provide us with an attribution link How to Provide Attribution? Article Link to be Hyperlinked
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