This glossary uses Visual Finance™ to bring financial terms to life. Each example shows data from the Round Number Company, a fictional business with simplified figures to make learning easier. For more details, visit 'How to Read Visual Finance'.
Ratio: Payables divided by the Average Daily COS
where Average Daily COS = (Annual COS/365)
Example: The Round Number CompanyCOS = 80; Payables = 20 Average Daily COS = 80/365 = 0.22 Days Payable Outstanding = 20/0.22 = 91 Days |
The ratio shows the company’s average payable period.
Days Payable Outstanding is part of the Cash Conversion Cycle.
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Calculator for Days Payable Outstanding
[{daysPayOut}] |
The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
term list.