Days Sales Outstanding - DSO

外汇网2021-06-19 16:02:25 109

A measure of the average number of days that a company takes to collect revenue after a sale has been made.A lowDSO number means that it takes a company fewer days to collect its accounts receivable.A high DSO numbershows that a company is sellingits product to customers on credit and taking longer to collectmoney.

Days sales outstanding is calculated as:

|||Due to the high importance of cash in running a business, it is in a company's best interest to collect outstanding receivables as quickly as possible. By quickly turning sales into cash, acompany has the chance to put the cash to use again - ideally, to reinvest and make more sales. The DSOcan beused to determinewhether a company is trying to disguise weak sales, or is generally being ineffective at bringing money in.For most businesses, DSOis looked at either quarterly orannually.

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