Updated 4 years ago by Darshan Patel

DSO is Days Sales Outstanding, an efficiency ratio that measures the average number of days a company takes to collect outstanding invoices from its customers. The calculation is carried out by dividing the accounts receivable as shown in a company’s balance sheet by the amount of sales per day. The latter is calculated by dividing the annual sales figure as set out in the company’s profit and loss account by 365 days. It may vary monthly or seasonally.

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