Days sales outstanding and Listing: Difference between pages

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(DSO). 
The acceptance of an issue of securities for trading on a recognised stock exchange.
 
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. 
 
 
<span style="color:#4B0082">'''Example 1'''</span>
 
Accounts receivable = EUR 50m.
 
Daily credit sales = EUR 2m.
 
 
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).
 
 
<span style="color:#4B0082">'''Example 2'''</span>
 
Annual credit sales = EUR 730m.
 
Accounts receivable = EUR 50m.
 
 
Then Days sales outstanding:
 
= (50 / 730)  x  365
 
= 25 days (as before).
 
 
A lower result is generally considered desirable, although the business needs to ensure it does not put itself at a competitive disadvantage to other businesses which offer easier credit terms to customers.
 
 
DSO is also sometimes known as Days billing outstanding (DBO) or Days receivables outstanding (DRO).




== See also ==
== See also ==
* [[Credit]]
* [[Private placement ]]
* [[Debtor days]]
* [[Initial public offering ]]
* [[Ratio analysis]]
* [[Introduction]]
* [[Listing particulars]]
* [[Over the counter]]
* [[Security]]
* [[Stock]]


[[Category:Manage_risks]]
[[Category:Equity]]
[[Category:Financial_products_and_markets]]

Revision as of 07:35, 24 May 2014

The acceptance of an issue of securities for trading on a recognised stock exchange.


See also