DPO Scenario Analysis
Evaluate the impact of extending payment terms and optimizing payables cycles. Designed for procurement strategy, supply chain finance, and working capital management.
WACC 8%
Treasury Mode
Days
%
Current Payables
Actual
840M
Current DPO: 45.2
Pro-Forma DPO
Goal
50.2Days
↑ 5.0 Days Extension
Liquidity Retained
FCF Impact
+92.5M
Projected Cash Preservation
Opportunity Gain
P&L Benefit
7.40M
Annualized at 8.0% WACC
DPO vs. Spend Concentration
Vendor Terms AnalysisScenario Cash Waterfall
Category ContributionSupplier Category Breakdown
| Category | Annual Spend (COGS) | Current AP | Current DPO | Target DPO | New AP Balance | Liquidity Impact | Risk Level |
|---|---|---|---|---|---|---|---|
| Raw Materials | $140.0M | $15.3M | 40 | 45 | $17.2M | +$1.90M | High |
| Logistics & Freight | $65.0M | $5.4M | 30 | 45 | $8.0M | +$2.60M | Low |
| IT & Software | $32.0M | $5.2M | 60 | 75 | $6.5M | +$1.30M | Medium |
| Marketing Services | $25.0M | $3.0M | 44 | 60 | $4.1M | +$1.10M | Medium |
| TOTAL DIRECT SPEND | $262.0M | $28.9M | 40.2 Avg | 49.6 Avg | $35.8M | +$6.90M | - |
Procurement Insights
Extending payment terms by an average of 5.0 days across the group will retain $6.9M in operating cash. At the current WACC of 8.0%, the avoided cost of capital (savings) is estimated at $552k annually. Focusing on Logistics & Freight offers the lowest supplier friction with high liquidity potential.