DPO: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Expand penultimate sentence of first definition.) |
imported>Doug Williamson (Add link.) |
||
| (3 intermediate revisions by the same user not shown) | |||
| Line 5: | Line 5: | ||
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. | 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. | 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 | |||
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. | |||
| Line 24: | Line 26: | ||
* [[Accounts payable management]] | * [[Accounts payable management]] | ||
* [[Creditors]] | * [[Creditors]] | ||
* [[ | * [[Data Protection Officer]] | ||
* [[ | * [[Days inventory outstanding]] | ||
* [[Days sales outstanding]] | |||
* [[General Data Protection Regulation]] | * [[General Data Protection Regulation]] | ||
* [[Payables management]] | * [[Payables management]] | ||
Latest revision as of 18:26, 2 June 2020
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.
