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Days Payables Outstanding Formula

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Days Payables Outstanding calculates the average number of days a company takes to pay its suppliers. Check FAQs

DPO = (\frac{AP avg}{COGS}) \cdot 365

DPO - Days Payables Outstanding?AP_avg - Average Account Payables?COGS - Cost of Goods Sold?

Days Payables Outstanding Example

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Here is how the Days Payables Outstanding equation looks like with Values.

Here is how the Days Payables Outstanding equation looks like with Units.

Here is how the Days Payables Outstanding equation looks like.

730 = (\frac{80000}{40000}) \cdot 365

730 = (\frac{80000}{40000}) \cdot 365

730 = (\frac{80000}{40000}) \cdot 365

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Days Payables Outstanding Solution

Follow our step by step solution on how to calculate Days Payables Outstanding?

FIRST Step Consider the formula

DPO = (\frac{AP avg}{COGS}) \cdot 365

Next Step Substitute values of Variables

∴

DPO = (\frac{80000}{40000}) \cdot 365

Next Step Prepare to Evaluate

∴

DPO = (\frac{80000}{40000}) \cdot 365

LAST Step Evaluate

∴

DPO = 730

Days Payables Outstanding Formula Elements

Variables

Days Payables Outstanding

Days Payables Outstanding calculates the average number of days a company takes to pay its suppliers.

Symbol: DPO

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Days Payables Outstanding

Average Account Payables

Average Account Payables is the average money owed by a company to its suppliers as per the balance sheet.

Symbol: AP_avg

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Average Account Payables

Cost of Goods Sold

The Cost of Goods Sold is the direct costs attributable to the production of the goods sold by a company.

Symbol: COGS

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Cost of Goods Sold

Other formulas in Financial Metrics category

Go Days Sales Outstanding

DSO = (\frac{AR avg}{NCS}) \cdot 365

Go Compound Annual Growth Rate

CAGR = (({(\frac{EV}{SV})}^{\frac{1}{n y}}) - 1) \cdot 100

Go Customer Selling Price

CSP = CP + (PM% \cdot CP)

Go Cost Plus Pricing

CPP = BEP \cdot PM

How to Evaluate Days Payables Outstanding?

Days Payables Outstanding evaluator uses Days Payables Outstanding = (Average Account Payables/Cost of Goods Sold)*365 to evaluate the Days Payables Outstanding, Days Payables Outstanding is calculated by dividing the average accounts payable balance by the cost of goods sold (COGS), and then multiplying by the number of days in the period (usually 365 days). Days Payables Outstanding is denoted by DPO symbol.

How to evaluate Days Payables Outstanding using this online evaluator? To use this online evaluator for Days Payables Outstanding, enter Average Account Payables (AP_avg) & Cost of Goods Sold (COGS) and hit the calculate button.

FAQs on Days Payables Outstanding

What is the formula to find Days Payables Outstanding?

The formula of Days Payables Outstanding is expressed as Days Payables Outstanding = (Average Account Payables/Cost of Goods Sold)*365. Here is an example- 730 = (80000/40000)*365.

How to calculate Days Payables Outstanding?

With Average Account Payables (AP_avg) & Cost of Goods Sold (COGS) we can find Days Payables Outstanding using the formula - Days Payables Outstanding = (Average Account Payables/Cost of Goods Sold)*365.

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Days Payables Outstanding Formula

Days Payables Outstanding Example

Days Payables Outstanding Solution

Days Payables Outstanding Formula Elements

Other formulas in Financial Metrics category

How to Evaluate Days Payables Outstanding?

FAQs on Days Payables Outstanding

Variable Name