Days Sales Outstanding
Definition: A measure of the average number of days it takes a company to collect payment after a sale. Calculated as Accounts Receivable ÷ (Revenue ÷ 365). Lo…
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A measure of the average number of days it takes a company to collect payment after a sale. Calculated as Accounts Receivable ÷ (Revenue ÷ 365). Lower DSO indicates faster collection.
Related Subjects
Components
- Accounts ReceivableA/R is the numerator in the DSO calculation
Related
- Receivable Turnover RatioDSO = 365 / receivable turnover; inverse measures
- Aging ScheduleBoth analyze how quickly receivables are collected
See Also
- Net Realizable Value of ReceivablesDSO assesses collection speed; NRV assesses collectibility
External Links
- Days sales outstanding — Wikipedia