DSO
Days Sales Outstanding
Short definition
DSO is the average number of days sales take to become cash. It is average trade receivables over credit sales, times days in the period. Ageing is hidden inside one average.
Detailed explanation
Using net sales versus credit sales in the denominator moves DSO. VAT-inclusive receivables over VAT-exclusive sales inflate DSO; keep the same tax base. A period-end campaign can leave average DSO low and the closing balance high.
Ageing (past-due buckets) flags collection risk earlier than DSO. Factoring takes receivables off the balance sheet and cosmetics DSO; the cash cost is interest-like.
Why it matters for the CFO
Pricing and customer limits tie to DSO and the cash margin. Stretching DSO while sales grow is the path into overtrading. The 13-week collections line is a DSO assumption.
How it is calculated
DSO = (Ortalama ticari alacak / Kredili satış) × Dönem gün sayısı
Variables in the formula
- DSO: Days sales outstanding
- AR: Average trade receivables
- Sales: Credit (or net) sales
How to read it
A DSO rise can be worse collections, a channel shift or a credit campaign. Sector and contract terms set “normal”; there is no universal threshold. Inflation can swell nominal AR and leave DSO flat.
Numerical example
Average trade receivables 80 mn TL, annual net sales 400 mn TL, 365 days → DSO = (80 / 400) × 365 = 73 days.
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Definitions are educational. They are not investment, credit or tax advice.