The denominator of the days payable outstanding ratio can be
A) average daily sales.
B) average trade accounts payable.
C) average daily cost of goods sold.
D) average trade accounts receivable.

Question

Quizplus · Accepted Answer

The denominator of the days payable outstanding (DPO) ratio is the average daily cost of goods sold, as it measures how long a company takes to pay its suppliers.

The Denominator of the Days Payable Outstanding Ratio Can Be