# What is my DPO?

Works out days payable outstanding (DPO), the average number of days a business takes to pay its suppliers, from accounts payable, cost of goods sold and the days in the period, with the accounts payable turnover.

- Page: https://www.acalculator.org/finance/dpo-calculator
- JSON spec: https://www.acalculator.org/finance/dpo-calculator.json
- Version: 8aee8792693f

## Default answer

Example with the default inputs (Accounts payable at the end $45,000.00, Cost of goods sold $400,000.00, Days in the period 365): With $45,000.00 of average payables and $400,000.00 cost of goods sold over 365 days, DPO is 41.06 days.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| ap | Accounts payable at the end | What the business owes its suppliers at the end of the period, from the balance sheet. |
| apstart | Accounts payable at the start (optional) | Accounts payable at the start of the period. When given, the average of the start and end balances is used. |
| cogs | Cost of goods sold | Cost of goods sold for the same period, from the income statement. Purchases can be used instead. |
| days | Days in the period | Days the cost of goods sold covers: 365 for a year, 90 or 91 for a quarter, 30 for a month. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| dpo | Days payable outstanding | Average accounts payable × days in the period ÷ cost of goods sold. |
| turnover | Accounts payable turnover | Cost of goods sold ÷ average accounts payable: how many times the payables are paid off in the period. |
| average | Average accounts payable | (Start + end) ÷ 2, or the end balance when no start balance is given. |
| perDay | Cost of goods sold per day | Cost of goods sold ÷ days in the period. |

## Method

Average accounts payable = (start + end) ÷ 2, or the end balance alone. DPO = average accounts payable × days in the period ÷ cost of goods sold. Accounts payable turnover = cost of goods sold ÷ average accounts payable, so DPO = days ÷ turnover.

## Assumptions

- Accounts payable and cost of goods sold cover the same period; the days are that period’s length.
- Cost of goods sold stands in for credit purchases from suppliers; type purchases instead if you have them.
- Every amount is at most $1 trillion, and cost of goods sold is at least $0.01.

## Worked examples

1. ap = $3,300,000.00, cogs = $30,000,000.00, days = 365 gives dpo = 40.15, turnover = 9.090909, average = $3,300,000.00. Source: OpenStax, Principles of Finance (Dahlquist and Knight, 2022), section 19.1: accounts payable turnover = cost of goods sold ÷ average accounts payable; payables deferral period = 365 ÷ turnover, https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital (scenario 2: turnover 9.09, 40.15 days).
2. ap = $2,800,000.00, cogs = $30,000,000.00, days = 365 gives dpo = 34.066667, turnover = 10.714286. Source: OpenStax, Principles of Finance (Dahlquist and Knight, 2022), section 19.1: accounts payable turnover = cost of goods sold ÷ average accounts payable; payables deferral period = 365 ÷ turnover, https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital (scenario 1: turnover 10.71, about 34 days).
3. apstart = $40,000.00, ap = $50,000.00, cogs = $400,000.00, days = 365 gives average = $45,000.00, dpo = 41.0625, turnover = 8.888889, perDay = $1,095.89. Source: OpenStax, Principles of Finance (Dahlquist and Knight, 2022), section 19.1: accounts payable turnover = cost of goods sold ÷ average accounts payable; payables deferral period = 365 ÷ turnover, https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital (average accounts payable = (beginning + ending) ÷ 2).
4. ap = $45,000.00, cogs = $100,000.00, days = 90 gives dpo = 40.5, turnover = 2.222222, perDay = $1,111.11. Source: OpenStax, Principles of Finance (Dahlquist and Knight, 2022), section 19.1: accounts payable turnover = cost of goods sold ÷ average accounts payable; payables deferral period = 365 ÷ turnover, https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital (the period's days in place of 365).

## FAQ

### How do you calculate days payable outstanding?

DPO = average accounts payable × days in the period ÷ cost of goods sold. With $45,000 of payables and $400,000 cost of goods sold in a year: 45,000 × 365 ÷ 400,000 = 41.06 days.

### What is the accounts payable turnover?

It is cost of goods sold ÷ average accounts payable: how many times in the period the business pays off what it owes suppliers. DPO is the days in the period ÷ the turnover, so a turnover of 9.09 in a year is 365 ÷ 9.09 = 40.15 days.

### Should I use ending or average accounts payable?

The average of the start and end balances, (start + end) ÷ 2, evens out a balance that was unusually high or low on the last day. Leave the start balance empty to use the end balance alone, which is common for a quick check.

### Why does DPO use cost of goods sold and not sales?

Suppliers bill at cost, so payables grow with what the business buys, not with what it charges customers. Cost of goods sold is the usual stand-in for purchases. If you know your credit purchases for the period, type them in the cost of goods sold box for a closer figure.

### Is a higher DPO better?

A higher DPO keeps cash in the business longer, which shortens the cash conversion cycle. Paying later than the supplier’s terms can cost early-payment discounts and goodwill, and a DPO that keeps rising can be a sign the business is short of cash. Compare your DPO with your suppliers’ payment terms, such as 30 days.

### How does DPO fit into the cash conversion cycle?

Cash conversion cycle = days of inventory + days of receivables − days payable outstanding. The days you take to pay suppliers are days you do not need to fund the inventory and receivables yourself.

## Sources

- OpenStax, Principles of Finance, Julie Dahlquist and Rainford Knight (Rice University, 2022), section 19.1, What Is Working Capital?: accounts payable turnover = cost of goods sold ÷ average accounts payable; average accounts payable = (beginning + ending) ÷ 2; payables deferral period = 365 ÷ accounts payable turnover; cash cycle. https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital (retrieved 2026-10-18)
- U.S. Securities and Exchange Commission, Beginners' Guide to Financial Statements (current liabilities include money owed to suppliers; cost of sales is what the company spent to produce the goods it sold in the period; the balance sheet is a snapshot, the income statement covers a period). https://www.sec.gov/about/reports-publications/beginners-guide-financial-statements (retrieved 2026-10-18)