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Ratios: Days Payable Outstanding (DPO)
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Problem 10
Ratios: Days Payable Outstanding (DPO)
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14. Financial Statement Analysis / Ratios: Days Payable Outstanding (DPO) / Problem 5
Problem 5
How might a high DPO be disadvantageous for a small supplier?
A
It indicates that the supplier is unable to pay its own suppliers on time.
B
It may strain cash flow as payments from large customers are delayed.
C
It suggests that the supplier has poor relationships with its customers.
D
It means the supplier is likely to face legal action from customers.
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