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Days Sales Outstanding Formula

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Days Sales Outstanding represents the collection efficiency of credit sales and measures the average number of days a company takes to collect cash from credit sales. Check FAQs

DSO = (\frac{AR avg}{NCS}) \cdot 365

DSO - Days Sales Outstanding?AR_avg - Average Account Receivables?NCS - Total Net Credit Sales?

Days Sales Outstanding Example

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Here is how the Days Sales Outstanding equation looks like with Values.

Here is how the Days Sales Outstanding equation looks like with Units.

Here is how the Days Sales Outstanding equation looks like.

2.92 = (\frac{8}{1000}) \cdot 365

2.92 = (\frac{8}{1000}) \cdot 365

2.92 = (\frac{8}{1000}) \cdot 365

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Days Sales Outstanding Solution

Follow our step by step solution on how to calculate Days Sales Outstanding?

FIRST Step Consider the formula

DSO = (\frac{AR avg}{NCS}) \cdot 365

Next Step Substitute values of Variables

∴

DSO = (\frac{8}{1000}) \cdot 365

Next Step Prepare to Evaluate

∴

DSO = (\frac{8}{1000}) \cdot 365

LAST Step Evaluate

∴

DSO = 2.92

Days Sales Outstanding Formula Elements

Variables

Days Sales Outstanding

Days Sales Outstanding represents the collection efficiency of credit sales and measures the average number of days a company takes to collect cash from credit sales.

Symbol: DSO

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Days Sales Outstanding

Average Account Receivables

Average Account Receivables is the sum of starting and ending accounts receivable over a time period (such as monthly or quarterly), divided by 2.

Symbol: AR_avg

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Average Account Receivables

Total Net Credit Sales

Total Net Credit Sales are sales made on credit. In other words, net credit sales are the revenues your business generates on account of selling goods to customers on credit.

Symbol: NCS

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Total Net Credit Sales

Other formulas in Financial Metrics category

Go Days Payables Outstanding

DPO = (\frac{AP avg}{COGS}) \cdot 365

Go Compound Annual Growth Rate

CAGR = (({(\frac{EV}{SV})}^{\frac{1}{n y}}) - 1) \cdot 100

Go Customer Selling Price

CSP = CP + (PM% \cdot CP)

Go Cost Plus Pricing

CPP = BEP \cdot PM

How to Evaluate Days Sales Outstanding?

Days Sales Outstanding evaluator uses Days Sales Outstanding = (Average Account Receivables/Total Net Credit Sales)*365 to evaluate the Days Sales Outstanding, Days Sales Outstanding can be calculated by dividing the total accounts receivable during a certain time frame by the total net credit sales. This number is then multiplied by the number of days in the period of time. Days Sales Outstanding is denoted by DSO symbol.

How to evaluate Days Sales Outstanding using this online evaluator? To use this online evaluator for Days Sales Outstanding, enter Average Account Receivables (AR_avg) & Total Net Credit Sales (NCS) and hit the calculate button.

FAQs on Days Sales Outstanding

What is the formula to find Days Sales Outstanding?

The formula of Days Sales Outstanding is expressed as Days Sales Outstanding = (Average Account Receivables/Total Net Credit Sales)*365. Here is an example- 2.92 = (8/1000)*365.

How to calculate Days Sales Outstanding?

With Average Account Receivables (AR_avg) & Total Net Credit Sales (NCS) we can find Days Sales Outstanding using the formula - Days Sales Outstanding = (Average Account Receivables/Total Net Credit Sales)*365.

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Days Sales Outstanding Formula

Days Sales Outstanding Example

Days Sales Outstanding Solution

Days Sales Outstanding Formula Elements

Other formulas in Financial Metrics category

How to Evaluate Days Sales Outstanding?

FAQs on Days Sales Outstanding

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