Days sales outstanding (also called DSO and days receivables) is a calculation used by a company to estimate the size of their outstanding accounts receivable. It measures this size not in units of currency, but in average sales days.
Typically, days sales outstanding is calculated monthly.
Higher DSO ratio can indicate a customer base with credit problems and/or a company that is deficient in its collections activity.
A low ratio may indicate the firm's credit policy is too rigorous, which may be hampering sales.
Days sales outstanding (also called DSO and days receivables) is a calculation used by a company to estimate the size of their outstanding accounts receivable. It measures this size not in units of currency, but in average sales days.
Typically, days sales outstanding is calculated monthly.
Higher DSO ratio can indicate a customer base with credit problems and/or a company that is deficient in its collections activity.
A low ratio may indicate the firm's credit policy is too rigorous, which may be hampering sales.
