DPO= (Average Accounts Payable ÷ Cost of Goods Sold) × 365 days Example: If the average AP is $15 million and the cost of goods sold is $100 million: DPO = ($15M ÷ $100M) × 365 ≈ 55 days.

As an example, let's say The Ford Motor Company has a general ledger balance that shows a total accounts payable balance of $106 million. However, management wants to see which suppliers are owed ...