Days sales outstanding: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Colour change of example headers) |
imported>Doug Williamson (Improve calculation.) |
||
| Line 29: | Line 29: | ||
Then Days sales outstanding: | Then Days sales outstanding: | ||
= 50 / 730 x 365 | = (50 / 730) x 365 | ||
= 25 days (as before). | = 25 days (as before). | ||
Revision as of 19:11, 15 January 2016
(DSO).
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.
Example 1
Accounts receivable = EUR 50m.
Daily credit sales = EUR 2m.
Then Days sales outstanding:
= 50 / 2
= 25 days.
Based on annual 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).
