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Days payable outstanding

We will now have a look at our accounts payable, or creditors, and a ratio called the Days Payable Outstanding (DPO).

This ratio is an efficiency ratio that measures the average number of days a company takes to pay its suppliers.

The DPO ratio is calculated as follows:

\(Days\,Payable\,Outstanding = \frac{Ending\,Balance\,Creditors}{Total\,Cost\,of\,Goods\,Sold} \times Days\,in\,Financial\,Year\)

T-Z wants to know its days payable outstanding and has asked you to calculate it.

The following is available in the workspace:

  • Total COGS for the period = 4000
  • Closing Payables balance = 650

Cet exercice fait partie du cours

Financial Forecasting in Python

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Instructions

  • Set the variables for cogs_tot and closing balance creditors creditors_end.
  • Calculate the Days Payable Outstanding dpo.
  • Print the dpo.

Exercice interactif pratique

Essayez cet exercice en complétant cet exemple de code.

# Get the variables
cogs_tot = ____
____ = 650

# Calculate the days payable outstanding
____ = (____/____)*365

# Print the days payable outstanding
print("The days payable outstanding is {}.".format(dpo))
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