Days payable outstanding (DPO) is the the number of days a company takes on average to pay back its suppliers (accounts payable). The formula for DPO can be expressed in two ways: Days Payable Outstanding = (Average Accounts Payable / Cost of Goods Sold) x Number of Days or Days Payable Outstanding = Average Accounts Payable / (Cost of Goods Sold / Number of Days) Ideally, a company should avoid having a very high or very low DPO for several reasons. A high DPO might indicate that either (1) the company is not using its cash on hand efficiently, or (2) creditors might refuse to extend further credit or offer favorable credit due to the long waiting time to get paid. On the other hand, a low DPO might mean that the company is not fully utilizing its credit period offered by the creditors and it has worse credit terms than industry competitors.

How to Use This Template

This simple Excel template calculates DPO using the COGS from an income statement and the accounts payable turnover ratio. Download this template and enter all the actual financial data (cells with blue font) in the income statement for the company you would like to analyze. This Excel template will then automatically generate the DPO figures for you!

Learn More About Days Payable Outstanding

Read CFI's DPO guide to understand the definition, formula and example calculation of DPO!  
Reviews Add a review

More From Corporate Finance Institute®

Browse our top rated business templates. See All
Financial Institution Dividend Discount Model
The financial institution dividend discount model uses future dividends to find the implied share price. This model is based on…
Loan Payment Calculator
The loan payment calculator allows users to determine the principal and interest payment each month until the full balance of…
DDM - Excel Dividend Discount Model Template
The dividend discount model template allows investors to value a company base on future dividend payments. This is based on…
Non-directional trading strategy template Non-directional Trading Strategies Template
The non-directional trading strategies template allow users to determine the profit when buying options. This template focuses on non-directional strategies…
restructuring financial model template preview 1 Restructuring Financial Model Template
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
TMT Financial Model Template Preview TMT Financial Model Template
This TMT financial model template is used to value technology, media, and telecom firms. This model provides a template to…