Days of sale outstounding - Revision history

Dirkjan at 19:24, 27 August 2020

2020-08-27T19:24:05Z

Dirkjan: Replaced content with "Days of sale outstounding Category:finance Category:M12 Category:Term"

2020-08-27T18:38:40Z

Replaced content with "Days of sale outstounding Category:finance Category:M12 Category:Term"

Dirkjan: Created page with "In accountancy, Days Sales Outstanding (also called Days Receivables) is a calculation used by a company to estimate their average collection period. A low number of days indi..."

2020-08-25T07:21:53Z

Created page with "In accountancy, Days Sales Outstanding (also called Days Receivables) is a calculation used by a company to estimate their average collection period. A low number of days indi..."

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In accountancy, Days Sales Outstanding (also called Days Receivables) is a calculation used by a company to estimate their average collection period. A low number of days indicates that the company collects its outstanding receivables quickly. The Days Sales Outstanding (DSO) figure is an index of the relationship between outstanding receivables and credit account sales achieved over a given period. The DSO analysis provides general information about the number of days on average that customers take to pay invoices.

DSO is considered an important tool in measuring liquidity. DSO tends to increase as a company becomes less risk averse. Higher DSO can also be an indication of poor follow up on delinquencies, or higher DSO might be the result of inadequate analysis of applicants for open account credit terms. An increase in DSO can result in cash flow problems, and may result in a decision to increase the creditor company's bad debt reserve.

Days Sales Outstanding, or DSO, is calculated as: Total Outstanding Receivables at the end of the period analyzed divided by Total Credit Sales for the period analyzed (typically 90 or 365 days), times the number of days in the period analyzed. That is,

{{{
DSO = (Receivables/Sales) * Days in Period (can use average receivables as a more conservative estimate)
}}}
[[Category:finance]]

[[Category:M12]]

[[Category:Term]]

← Older revision		Revision as of 18:38, 27 August 2020
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−	~~In accountancy,~~ Days Sales Outstanding (also called Days Receivables) is a calculation used by a company to estimate their average collection period. A low number of days indicates that the company collects its outstanding receivables quickly. The Days Sales Outstanding (DSO) figure is an index of the relationship between outstanding receivables and credit account sales achieved over a given period. The DSO analysis provides general information about the number of ~~days on average that customers take to pay invoices.~~	+	Days of sale outstounding
−
−	DSO is considered an important tool in measuring liquidity. DSO tends to increase as a company becomes less risk averse. Higher DSO can also be an indication of poor follow up on delinquencies, or higher DSO might be the result of inadequate analysis of applicants for open account credit terms. An increase in DSO can result in cash flow problems, and may result in a decision to increase the creditor company's bad debt reserve.
−
−	Days Sales Outstanding, or DSO, is calculated as: Total Outstanding Receivables at the end of the period analyzed divided by Total Credit Sales for the period analyzed (typically 90 or 365 days), times the number of days in the period analyzed. That is,
−
−	~~{{{~~
−	~~DSO = (Receivables/Sales) * Days in Period (can use average receivables as a more conservative estimate)~~
−	~~}}}~~
	[[Category:finance]]		[[Category:finance]]

← Older revision		Revision as of 19:24, 27 August 2020
Line 1:		Line 1:
−	Days of ~~sale outstounding~~	+	In accountancy, Days Sales Outstanding (also called Days Receivables) is a calculation used by a company to estimate their average collection period. A low number of days indicates that the company collects its outstanding receivables quickly. The Days Sales Outstanding (DSO) figure is an index of the relationship between outstanding receivables and credit account sales achieved over a given period. The DSO analysis provides general information about the number of days on average that customers take to pay invoices.
		+
		+	DSO is considered an important tool in measuring liquidity. DSO tends to increase as a company becomes less risk averse. Higher DSO can also be an indication of poor follow up on delinquencies, or higher DSO might be the result of inadequate analysis of applicants for open account credit terms. An increase in DSO can result in cash flow problems, and may result in a decision to increase the creditor company's bad debt reserve.
		+
		+	Days Sales Outstanding, or DSO, is calculated as: Total Outstanding Receivables at the end of the period analyzed divided by Total Credit Sales for the period analyzed (typically 90 or 365 days), times the number of days in the period analyzed. That is,
		+
		+	{{{
		+	DSO = (Receivables/Sales) * Days in Period (can use average receivables as a more conservative estimate)
		+	}}}
	[[Category:finance]]		[[Category:finance]]