DPO Measures the Efficient Use of Working Capital

Days payables outstanding (DPO) is a measurement that many executives, auditors, and consultants use to measure the efficiency of accounts payable departments. It is an important metric used in measuring the efficient use of working capital. While AP isn’t solely responsible for this number, a well-run AP department maximizes its contribution to DPO by every means possible. What Is DPO? In the parlance of financial ratios, DPO is classified as an activity ratio. Simply put, it is a company’s…