Days Payable Outstanding (DPO)

The average number of days a company takes to pay its bills and invoices, indicative of how well it manages its payables and cash flow. A longer DPO can suggest a business is utilizing its available cash more effectively by holding onto funds longer, but it might also risk damaging relationships with suppliers if perceived as too lengthy. Conversely, a shorter DPO might indicate faster payment processes but could also suggest that the company is not maximizing the potential benefits of its available cash.