Days Sales Outstanding

Days sales outstanding (DSO) marks the average number of days from when a sale is made to when the revenue is collected.

To calculate DSO, first take the sum of the company’s beginning and ending receivables (beginning receivables + ending receivables) and divide it by two to find accounts receivable.

To then calculate DSO, use the following formula:

Days Sales Outstanding = (Accounts Receivables/Net Credit Sales) x 365