DPO calculator
- Formula
- (Ending AP ÷ COGS for the period) × Days in the period
DPO = (Ending AP ÷ COGS) × Days in the period90 for a quarter, 365 for a year.
Days payable outstanding
32.0 days
How it’s worked out
- 1(Ending AP ÷ COGS) × days($320,000 ÷ $900,000) × 9032.0 days
Runs in your browser; nothing you type is sent anywhere. Amounts in US dollars.
Worked on a real month of books
Northwind Traders, Inc., September 2026 (accrual basis, USD), the month the free course is taught on. Every figure is read off the course's posted ledger, not typed.
- 1(Ending AP ÷ cost of revenue) × days($6,000 ÷ $17,000) × 3010.6 days
See the statements these come from in the course.
How to read it
DPO converts the payables balance into days of purchases: how long the company holds its cash before paying suppliers.
It offsets DSO and inventory days in the cash conversion cycle. Paying on terms — not early, not late — is usually optimal.
Common mistakes
- Using revenue instead of cost of goods sold or purchases as the flow.
- Stretching payables past terms to improve the number.
Questions
- What does DPO mean?
- Days payable outstanding: how many days of purchases are still unpaid at the period's end.
- Is a higher DPO better?
- Close to supplier terms. A DPO far above terms usually means paying late, which costs discounts and goodwill.
Read it with
The metrics read alongside this one, and the terms it is confused with.
- Accounts payable vs accounts receivableAccounts payable is money the company owes to its suppliers; accounts receivable is money its customers owe it — a liability on one side of the balance sheet and an asset on the other.Compare
- DSO vs DPODSO measures how many days of sales are still uncollected; DPO measures how many days of purchases are still unpaid — together with inventory days they make the cash conversion cycle.Compare
- DSO calculatorDSO is a liquidity and working-capital metric, calculated as (Ending AR ÷ Credit sales for the period) × Days in the period.Calculator
- DIO calculatorDIO is a liquidity and working-capital metric, calculated as (Inventory ÷ COGS for the period) × Days in the period.Calculator
- Cash conversion cycle calculatorCCC is a liquidity and working-capital metric, calculated as DSO + DIO − DPO.Calculator
- DPODPO is a liquidity and working-capital metric, calculated as (Ending AP ÷ COGS for the period) × Days in the period.Term
The formula is the one the glossary states, and the arithmetic is unit-tested. A ratio with nothing to divide by shows a dash — undefined is not zero. General information, not financial advice.