Days Sales Outstanding (DSO)

Knowledge Center


Description of Days Sales Outstanding. Explanation.



Days Sales Outstanding (DSO)

Definition Days Sales Outstanding (DSO). Description

Days Sales Outstanding (DSO) is a financial performance ratio, which indicates how long it takes a company to collect accounts receivable after a sale has been made and is therefore an important tool to measure liquidity.

Although the average DSO varies from one industry and region to another, a low DSO number indicates that a company collects its outstanding receivables quickly, whereas a high DSO number shows that a company is selling its products and services to customers on credit and requires more time to collect the money, which might be an indication of poor credit management and could ultimately lead to cash flow problems.

Calculation of Days Sales Outstanding. Formula

The DSO ratio is calculated as follows:

DSO = (Accounts Receivable / Total Credit Sales in Accounting Period) x Days in Accounting Period

In this formula, the days in accounting period are typically 90 days for quarterly statements or 365 days for yearly statements.

DSO forms one part of the Cash Conversion Cycle, which represents the length of time that it takes a company to convert resource inputs into cash flows.

Days Sales Outstanding (DSO) is also known as Days Receivables.

Days Sales Outstanding Special Interest Group

Special Interest Group (48 members)

Days Sales Outstanding Forum  

Recent topics

  Quotes on the Importance of Money. Quotations
Hi, do you know of a remarkable, humorous quote by a famous person or a proverb related to the importance of money and of liquidity?
Please enter a...

Best Practices - Days Sales Outstanding

Expert Tips - Days Sales Outstanding

Advance yourself in business administration and management

Resources - Days Sales Outstanding

News about Days Sales Outstanding


Videos about Days Sales Outstanding


Presentations about Days Sales Outstanding


Books about Days Sales Outstanding


More about Days Sales Outstanding


Accelerate your management career

Special Interest Group Leader


Return to Management Hub: Finance & Investing

More on Management  |  Return to Management Dictionary  | 


This ends our Days Sales Outstanding (DSO) summary and forum.

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2018 12manage - The Executive Fast Track. V15.0 - Last updated: 19-12-2018. All names of their owners.