Fundamental Glossary / Working Capital & Operational Efficiency
Payable Days
The average number of days the company takes to pay suppliers.
Formula
Average trade payables / purchases x number of days. Cost of goods sold is the fallback when purchases are not disclosed.
What it means
Payable days are the supplier-finance term. Longer days mean the company holds cash longer.
There is a competitive limit. Push days out too far and suppliers raise prices, delay shipment, or stop shipping.
How to read it
A sudden jump in payable days boosts operating cash flow once and then has to be maintained. It is not a new source of cash every year unless days keep rising.
What to watch
Separate trade payables from dues to related parties and from capex creditors. A payable to the promoter is not the same as credit from an independent supplier.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.