Days Payables Outstanding – DSO - or ‘Payables Conversion Period’
refers to average number of days your company takes to pay its suppliers. If
this can be maximized, the company holds onto cash longer, maximizing its
investment potential; therefore, a longer DPO is generally better.
As your DIO and DSO,
your DPO is an important component of another important metrics – Cash
Conversion Cycle.
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