Accounts Payable
Money the company owes to suppliers for goods and services already received but not yet paid for. Accounts payable is the balance-sheet mirror of accounts receivable: where AR is an asset (a claim on customers), AP is a liability (a claim from suppliers). The translation to days — Days Payable Outstanding (DPO) — reveals whether the company is using supplier credit as a cheap financing source (high DPO, common at Costco and Walmart) or is in a cash crunch that is forcing late payment to suppliers. A 20-day stretch in DPO can be a strategic moat or an early-warning sign depending on whether the supplier relationships remain healthy.
Lessons that use this term
Related terms
Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay · Average Ticket
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