DPO: Difference between revisions
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A higher number is generally perceived as better, but a business needs to maintain the goodwill of its suppliers and | A higher number is generally perceived as better, but a business needs to maintain the goodwill of its suppliers and shorter payment terms may therefore be necessary. | ||
Revision as of 11:18, 6 February 2019
1.
Days Payables Outstanding.
A working capital management ratio calculated by dividing accounts payable outstanding at the end of a time period by the average daily credit purchases for the period.
For example: a company has an average of £50,000 of payables over a year in which the cost of goods sold was £400,000.
The DPO is:
50,000 / 400,000 * 365 = 45.6 days
A higher number is generally perceived as better, but a business needs to maintain the goodwill of its suppliers and shorter payment terms may therefore be necessary.
Also known as creditor days.
2.
Data Protection Officer.
