Days sales outstanding and Governance: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Standardise appearance of page)
 
imported>Doug Williamson
(Add link.)
 
Line 1: Line 1:
(DSO).   
1.  ''Organisations - internal frameworks.''


A credit measurement ratio calculated by dividing accounts receivable outstanding at the end of time period by the average daily credit sales for the period.   
A framework that provides guidance on strategy including assessing risk, ensures effective monitoring of management and makes certain that managers are accountable to stakeholders.   


In the commercial context, this framework is known as ''corporate governance''.


'''Example 1'''


Accounts receivable = EUR 50m.
2. ''Markets - financial organisations.''


Daily credit sales = EUR 2m.
The broader set of relationships and responsibilities of an organisation, particularly of a financial organisation.


Governance in this context extends to other parties including other interdependent organisations and the broader financial markets.


Then Days sales outstanding:
= 50 / 2
= 25 days.
Based on <u>annual</u> total sales - or total sales for any other period - the calculation is modified appropriately for the length of the time period in days (for example 365 days per year).
'''Example 2'''
Annual credit sales = EUR 730m.
Accounts receivable = EUR 50m.
Then Days sales outstanding:
= 50 / 730 x 365
= 25 days (as before).
DSO is also sometimes known as Days billing outstanding (DBO) or Days receivables outstanding (DRO).


== See also ==
* [[Accountability]]
* [[Audit]]
* [[Boilerplate]]
* [[Corporate governance]]
* [[Environmental & Social issues]]
* [[ESG]]
* [[Ethics]]
* [[Process strategy]]
* [[Whistle-blowing]]


== See also ==
[[Category:Corporate_finance]]
* [[Credit]]
[[Category:Compliance_and_audit]]
* [[Debtor days]]
[[Category:Ethics]]
* [[Ratio analysis]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Treasury_operations_infrastructure]]

Revision as of 15:27, 7 March 2022

1. Organisations - internal frameworks.

A framework that provides guidance on strategy including assessing risk, ensures effective monitoring of management and makes certain that managers are accountable to stakeholders.

In the commercial context, this framework is known as corporate governance.


2. Markets - financial organisations.

The broader set of relationships and responsibilities of an organisation, particularly of a financial organisation.

Governance in this context extends to other parties including other interdependent organisations and the broader financial markets.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Days_sales_outstanding&oldid=23684’