Days sales outstanding: Estimating How Long Credit Sales Stay Uncollected
DSO relates average receivables to credit sales over a chosen period. It provides a rough collection measure that can be tracked against the business's own history.
Use the Days sales outstanding Calculator to enter your own figures and compare the result with the worked example below.
Days sales outstanding formula
DSO = Average accounts receivable ÷ Credit sales × Days
Worked example
| Item | Example value |
|---|---|
| Average accounts receivable | 10000 USD |
| Credit sales | 100000 USD |
| Days in period | 365 days |
| Days sales outstanding | 36.5 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Use credit sales rather than all sales when appropriate. Seasonality and changes in customer mix can affect the result.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see SEC: Understanding financial statements. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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