Days sales outstanding: Difference between revisions

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'''For example;'''  
'''For example:'''


if accounts receivable = EUR 50m; and
if accounts receivable = EUR 50m; and

Revision as of 09:08, 15 March 2015

(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.


For example:

if accounts receivable = EUR 50m; and

Daily credit sales = EUR 2m

Then Days sales outstanding

= EUR 50m / EUR 2m

= 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).


For example;

given annual credit sales = EUR 730m (and accounts receivable = EUR 50m as before):

Days sales outstanding

= EUR 50m /EUR 730m x 365 days

= 25 days (as before).


Also known as Days billing outstanding (DBO) or Days receivables outstanding (DRO).


See also