Measures the average number of days it takes for a company to collect payment after a sale.
What it Measures ?
How many days customers take to pay us.
Relevant StakeHolders
Accounts Receivable Team, CFO
In-depth Use Case / Real-world Example
DSO is calculated by dividing accounts receivable by total credit sales, then multiplying by the number of days in the period. For example, if a company has ₹200,000 in receivables and ₹1,000,000 in credit sales over 365 days, the DSO is 73 days. A lower DSO indicates efficient collections and healthy cash flow.
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