Days payable outstanding

How long the company takes to pay its suppliers, measured as trade payables divided by purchases, multiplied by 365; cost of goods sold is the usual stand-in when purchases are not disclosed.

With ₹540 crore of payables on ₹3,900 crore of purchases, a distributor pays in about 51 days.

A lengthening figure is ambiguous in a way the other two working capital measures aren't. It can mean the company gained scale and negotiated better terms, which is a real improvement. It can equally mean the company is short of cash and paying late, which is the beginning of a supply problem. In the ratio the two look identical, and in the notes they look different. Indian accounts disclose trade payables to micro and small enterprises separately there, along with any interest payable on overdue amounts.

Late payment becomes visible in that separate disclosure.