Days' payables outstanding (DPO), which tells how long a firm takes to pay off its suppliers for the cost of inventory, is used to measure the operating cycle.

Question

Quizplus · Accepted Answer

DPO measures the average time a company takes to pay its suppliers, but it is not used to measure the operating cycle. The operating cycle is measured by the sum of days inventory outstanding (DIO) and days sales outstanding (DSO).

Days' Payables Outstanding (DPO), Which Tells How Long a Firm