Days' payables outstanding (DPO) tells how long a company takes to pay off its suppliers for the cost of inventory.

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Days' payables outstanding (DPO) is a financial ratio used to determine how long it takes a company to pay off its suppliers for the purchased goods or inventory. It is calculated by dividing accounts payable by the cost of goods sold, and then multiplying the result by the number of days in the period. A higher DPO indicates that a company is taking longer to pay its suppliers, which may signal cash flow or relationship problems, while a low DPO indicates that a company is paying its suppliers more quickly and may be benefiting from discounts or favorable terms.

Days' Payables Outstanding (DPO) Tells How Long a Company Takes