Days Sales Outstanding (DSO): Meaning in Finance, Calculation, and Applications
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May 13
What the Numbers Tell YouA high DSO number shows that a company is selling its product to customers on credit and waiting a long time to collect the money. This can lead to cash flow problems. A low DSO value means that it takes a company fewer days to collect its accounts receivable. That company is promptly getting the money it needs to create new business. In effect, determining the average length of time that a company’s outstanding balances are carried in receivables can reveal a great d...
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