Overview
Days Sales Outstanding (DSO), shows how effectively assets, receivables, inventory, and operating resources are utilized. Quarterly (Q) scope increases short-term volatility visibility.
Formula
365 / Receivables Turnover
How to Interpret
High Value
A sustained high Days Sales Outstanding (DSO) can shift expectations around the firm’s cost of capital.
Low Value
If Days Sales Outstanding (DSO) remains depressed, investors may revise forward assumptions downward.
Where It Is Used
Days Sales Outstanding (DSO) should be paired with at least one complementary quality metric in decision filters.