Date Added: Jun 2009
During tough economic times, monitoring your Day's Payables Outstanding (DPO) metric is extremely important. DPO shows how long it takes you to pay vendors. It's important because it's a key component in your company's formula for calculating working capital. Companies must maintain the proper amount of working capital to pay for daily operations and to finance future growth. So if your DPO is out of whack, it will throw your company's working capital out of whack too.