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The DSO ratio is a financial ratio that illustrates how well a company's accounts receivables are being managed. Here accounts receivables refer to the amount of money due to the company for the services/goods provided to its customers.

Formula:

DSO = Accounts Receivable / Average sales per day or

DSO = Accounts Receivable / (Annual Sales / 365)

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13y ago
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17y ago

Basic formula is DSO=Accounts Receivable/Sales x 365 although there are many variations on the calculation which attempt to make it more sophisticated and meaningful.

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Q: How do you find Days Sales Outstanding?
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How do you find Deduction Days Outstanding?

(Deduction outstanding/Deductions incurred)*no. of days analysed


How reduce days sales outstanding?

You reduce days sales outstanding by collecting accounts receivable faster. One of the best ways to do this is to have an effective A/R policy. For tips on how to develop an effective A/R strategy for your business visit www.ncscus.com.


What does dso stand for?

Digital Switch Over?If this refers to Accounts ReceivableThen is Days Sales Outstanding to calculate DSO = (Accounts Receivable/Total Credit Sales) / Number of Days


Formula for setting a credit line?

divide sales by 365 days add A/R days and inventory days together and subtract A/P day outstanding divide avaerage dail sales by cash conversion cycle


Which type of financial ratio indicates how efficiently the managers of the organization are collecting the revenues due to the organization from the sales of its products or services?

Days sales outstanding ratio


How do you calculate accounts receivable days outstanding?

First calculate A/R turnover: A/R Turnover = Sales/ Average A/R A/R days outstanding = Amt. of days in a year (could be 360 or 365 depending on problem) divided by A/R turnover In short, A/R outstanding = 365/accounts receivable turnover.


A firm has a days sales outstanding of 40 days and its annual sales are 7300000 what is the accounts receivable balance?

For calculating accounts receivable balance we need accounts receivable turnover rate So Accounts receivable turnover rate = number of days in year/annual sales outstanding accounts receivable turnover rate = 360/40 = 9 Accounts receivable balance = 7300000/9 Accounts receivable balance = 811111


Which category is days sales in receivable?

The days sales in accounts receivable ratio (or the collection period ratio) falls under the category of liquidity ratios. It measures the number of days that net receivables are outstanding, and is calculated by: (365 days × Average Net Receivables) / Net Credit Sales Days Sales in Receivables measures how long it takes for the average debtor to settle his/her account; the smaller the ratio, the faster it takes and the better it is for the company.


What is term for the average time it takes your customer to pay you?

NET 30, 60, or 90 are typical payment expectations for customers. Net 30 = 100% of the balance paid in 30 days, Net 60 is 50% paid by 30 days and the remaining 50% by day 60, and so on. The ability to collect from a customer declines substantially after 90 days. Some say that you'll lost 60% of your recievables after day 90.


What is the term for the average time it takes customers to pay?

The average time it takes for customers to pay is referred to as Days Sales Outstanding. Computing this ratio lets companies know how fast they are turning sales into cash.


What is fullform of DSO?

1) Device Software Optimization 2) Detroit Symphony Orchestra 3) Dallas Symphony Orchestra 4) Days Sales Outstanding


Debtor collection period ratio?

Debt Collection Period ratio, is the year's sales which were outstanding at the balance sheet date, expresse in days. A rough measure of the days of credit that a firm's offers to its suppliers/clients. The formula is as follows: = (average debtors / turnover) * 365 Debt Collection Period ratio, is the year's sales which were outstanding at the balance sheet date, expresse in days. A rough measure of the days of credit that a firm's offers to its suppliers/clients. The formula is as follows: = (average debtors / turnover) * 365