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imported>Doug Williamson |
imported>Doug Williamson |
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| (DSO).
| | The acceptance of an issue of securities for trading on a recognised stock exchange. |
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| 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.
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| <span style="color:#4B0082">'''Example 1'''</span>
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| Accounts receivable = EUR 50m.
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| Daily credit sales = EUR 2m.
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| Then Days sales outstanding:
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| = 50 / 2
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| = 25 days.
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| 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).
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| <span style="color:#4B0082">'''Example 2'''</span>
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| Annual credit sales = EUR 730m.
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| Accounts receivable = EUR 50m.
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| Then Days sales outstanding:
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| = (50 / 730) x 365
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| = 25 days (as before).
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| 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.
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| DSO is also sometimes known as Days billing outstanding (DBO) or Days receivables outstanding (DRO).
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| == See also == | | == See also == |
| * [[Credit]] | | * [[Private placement ]] |
| * [[Debtor days]] | | * [[Initial public offering ]] |
| * [[Ratio analysis]] | | * [[Introduction]] |
| | * [[Listing particulars]] |
| | * [[Over the counter]] |
| | * [[Security]] |
| | * [[Stock]] |
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| [[Category:Manage_risks]] | | [[Category:Equity]] |
| [[Category:Financial_products_and_markets]]
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Revision as of 07:35, 24 May 2014
The acceptance of an issue of securities for trading on a recognised stock exchange.
See also