Measures the average number of days it takes for a company to pay its suppliers.

What it Measures ?

How many days we take to pay our suppliers.

Relevant StakeHolders 

Procurement, Finance Team

In-depth Use Case / Real-world Example

DPO is calculated by dividing accounts payable by COGS, then multiplying by the number of days in the period. If a company has ₹150,000 in payables and ₹1,000,000 in COGS, DPO is 55 days. A higher DPO means a company is taking longer to pay its suppliers, which could indicate better cash management or potential supplier relationship issues.