Result
DSO
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
DSO = accounts receivable ÷ revenue for the period × number of days in the period (365 for a year, 90 for a quarter). It shows how many days on average pass between a sale and actually collecting the cash.
A rising DSO isn't always a collections problem — it can also come from deliberately looser payment terms offered to win a big customer, or from a shift in the customer mix toward slower payers. It's worth tracking DSO over time and alongside the reason for the change, not as an isolated number.
DSO is one of three components of the Cash Conversion Cycle, alongside DIO (inventory) and DPO (payables). For the full picture of how much cash a business ties up in its operating cycle, all three are worth looking at together.