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imported>Doug Williamson |
imported>Charles Cresswell |
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| ''Financial ratio analysis - management efficiency ratios.''
| | International Accounting Standard 7, dealing with statement of cash flows. |
| | | Issued by the International Accounting Standards Board. |
| (DPO).
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| Days payables outstanding are 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.
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| Payables days measures the average number of days taken to pay trade suppliers.
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| 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.
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| The DPO is:
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| 50,000 / 400,000 * 365 = 45.6 days
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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 shorter payment terms may therefore be necessary.
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| Also known as Creditor days or Payables days.
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| == See also == | | == See also == |
| * [[Creditors]] | | * [[FRS 1]] |
| * [[Debtor days]] | | * [[International Financial Reporting Standards]] |
| * [[Management efficiency ratio]]
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| * [[Payables management]]
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| [[Category:Accounting,_tax_and_regulation]] | | [[Category:Cashflow_Forecasting]] |
| [[Category:The_business_context]] | | [[Category:Accounting_and_Reporting]] |
Revision as of 16:57, 18 June 2013
International Accounting Standard 7, dealing with statement of cash flows.
Issued by the International Accounting Standards Board.
See also
