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Ratios: Days Payable Outstanding (DPO)
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Ratios: Days Payable Outstanding (DPO)
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14. Financial Statement Analysis / Ratios: Days Payable Outstanding (DPO) / Problem 1
Problem 1
What is a potential disadvantage of a high DPO?
A
It indicates that the company is paying its suppliers too quickly.
B
It means the company is not utilizing its credit terms.
C
It suggests that the company has no leverage over its suppliers.
D
It may strain supplier relationships if payments are consistently delayed.
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