DPO vs payables turnover
Payables turnover is 365 divided by days payable outstanding. A DPO of 30 days is 12.17 turns a year. DPO 100 is 3.65 turns. They are one clock written as a wait and as a rate of turns.
| Days payable outstanding | Payables turnover | |
|---|---|---|
| Formula | DPO, typed in. Usually payables over daily cost of goods. | 365 / DPO. |
| First sheet | DPO 30. Operating cycle 105. CCC 75. | 365 / 30 = 12.17 turns. |
| Stretched terms | DPO 100. Operating cycle 50. CCC minus 50. | 365 / 100 = 3.65 turns. |
| Equal clocks | DPO 40. Operating cycle 80. CCC 40. | 365 / 40 = 9.125 turns. |
| 360 day year | DPO is still 30. Only the invert changed. | 360 / 30 = 12 exactly, a different convention. |
| When you would pick it | The supplier clock inside CCC. | A turns ranking, remembering that faster payment is more turns. |
On this page
One clock, two printings
12.17 turns and 30 days are . How payables turnover works is the invert. How days payable outstanding works is the days. The cash conversion cycle calculator takes DPO as an input.
Ranking payables turnover high to low ranks the firms that pay fastest. Ranking CCC low to high ranks the firms whose suppliers fund more of the loop. They are opposite sorts of the same clock.
DSO against receivables turnover is the customer cousin.
Name the year
A 360 day year prints 12 turns on a 30 day DPO. A 365 day year prints 12.17. Mixing them is a fake ranking. This is educational material, not financial advice.
Worked examples
30 days, 12.17 turns
DSO 45, DIO 60, DPO 30. Turnover on a 365 day year?
- Turnover 12.17.
- Operating cycle 105 days. CCC 75 days.
Payables turnover is 12.17 times a year. DPO is 30. Operating cycle 105 days. CCC 75 days.
100 days, 3.65 turns
DSO 30, DIO 20, DPO 100. Turnover?
- Turnover 3.65.
- Operating cycle 50 days. CCC minus 50 days.
Payables turnover is 3.65 times a year. DPO is 100. Operating cycle 50 days. CCC minus 50 days.
40 days, 9.125 turns
DSO 40, DIO 40, DPO 40. Turnover?
- Turnover 9.125.
- Operating cycle 80 days. CCC 40 days.
Payables turnover is 9.125 times a year. DPO is 40. Operating cycle 80 days. CCC 40 days.
Common questions
Which one should I quote?
They are one clock. Quote both, or name which invert you used and whether the year is 365 or 360.
Is a higher turnover better?
It means the firm pays faster. That can be cheaper terms, or cash leaving sooner.
Does this page compute DPO from payables?
No. DPO is an input. This is educational material, not financial advice.
Keep reading
This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.