Days sales outstanding (DSO)
How many days on average customers take to pay.
Lengthening collection is the classic first symptom of channel stuffing or a weakening customer base.
How it is computed here
Accounts receivable x 365 / revenue
Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it. Filed under risk. Lower is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- A year-end snapshot, so a large December sale inflates it.
- Selling receivables to a factor shortens this without anything improving.
- There is no cross-industry threshold worth printing. The peer percentile against companies in the same industry is the only defensible reading.
Not meaningful for banks, insurers: the product prints n/m with the reason rather than a number for them.
Questions
How is days sales outstanding calculated?
Accounts receivable x 365 / revenue. Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it.
What does days sales outstanding tell a value investor?
Lengthening collection is the classic first symptom of channel stuffing or a weakening customer base.
When does days sales outstanding mislead?
A year-end snapshot, so a large December sale inflates it. Selling receivables to a factor shortens this without anything improving. There is no cross-industry threshold worth printing. The peer percentile against companies in the same industry is the only defensible reading.