Respuesta :
Days sales outstanding (DSO) is a measure of how frequently a company collects accounts receivables. it is computed by dividing the current balance of receivables by the annual credit sales and then multiplying by 365
Explanation:
Days sales outstanding (DSO) is a measure of how many days, on average, it takes a company to collect payment on its accounts receivables.
It is expressed as a number of days and is calculated by dividing the current balance of receivables by the annual credit (or net) sales and then multiplying by 365.
For example, if a company has a current balance of receivables of $500,000 and annual credit sales of $2,000,000, its DSO would be 91.8 days, calculated as follows:
($500,000 / $2,000,000) x 365 = 91.8 days.
A lower DSO indicates that the company is collecting payments more quickly, while a higher DSO indicates that the company is taking longer to collect payments. Generally, companies should strive to keep their DSO as low as possible in order to maintain a healthy cash flow.
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