Respuesta :
It takes an average 66 days for the company to pay off its suppliers during the year.
Calculation
Days Payable Outstanding can be calculated using this following formula:
Days Payable Outstanding = (Accounts Payable × 365) / Cost of Goods Sold
= (7,943 × 365) / 43,921
= 66.01
So, Days Payable Outstanding is 66 days and we can assume that it takes an average 66 days for the company to pay off its suppliers during the year.
What is accounts payable balance?
Accounts payable (AP), sometimes known as "payables," is the term used to describe a business's current short-term obligations to its suppliers or creditors. A company's payables are listed as a current obligation on its balance sheet.
The business division or department in charge of making payments due by the company to suppliers and other creditors is referred to as "AP" in another, less prevalent usage.
Learn more about Accounts payable
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