This measure evaluates how many days, on average, a company takes to pay its creditors. It is calculated as the average value of accounts payable balance divided by (cost of goods sold divided by 365 days). As part of a set of Cycle Time measures, it helps companies analyze the duration of the process "procure materials and services" from beginning to end.
Days payable outstanding
Cycle time is the total time from the beginning of the process to the end. This includes both time spent actually performing the process and time spent waiting to move forward.