Asked by Areeba Zahir on Feb 18, 2024



Describe DSO.

Accounts Receivable

Money owed to the company for goods or services provided and billed to a customer.

  • Analyzing the importance of DSO in financial management
  • Identifying the factors that affect DSO
  • Understanding the concept of DSO (Days Sales Outstanding)

Verified Answer

carlee burnside

Feb 18, 2024

Final Answer :
DSO is a measure of the number of days that it takes to collect on accounts receivable.Remember,if you do business in cash,then your DSO is zero,but if you sell on credit,then this will be a positive number.DSO is calculated using the following equation: DSO = Average Accounts Receivable/Revenue per day Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable)/2 Revenue per day = Revenue/365