Days payables outstanding (DPO)
How many days on average the company takes to pay its own suppliers.
Paying late is free financing from suppliers, and a strong buyer can extract a great deal of it.
How it is computed here
Accounts payable x 365 / cost of revenue
Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it. Filed under risk. Neither a high nor a low reading is good on its own, so it is never coloured as one.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Longer is a cash advantage and also a sign of strain. The number alone cannot tell you which.
- Supply-chain finance programmes hide extended terms from this line entirely.
Not meaningful for banks, insurers: the product prints n/m with the reason rather than a number for them.
Questions
How is days payables outstanding calculated?
Accounts payable x 365 / cost of revenue. Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it.
What does days payables outstanding tell a value investor?
Paying late is free financing from suppliers, and a strong buyer can extract a great deal of it.
When does days payables outstanding mislead?
Longer is a cash advantage and also a sign of strain. The number alone cannot tell you which. Supply-chain finance programmes hide extended terms from this line entirely.