Days Sales Outstanding Formula DSO Formula can be calculated by dividing the account receivable by the net credit sales and multiply it by the number of days in the period. Often this formula is used at the end of the year due to which number of days 365 and in the equation form it can be written as
Days Sales Outstanding = (Account Receivable/Net credit sales) x 365
On the year-end balance sheet Account receivable can be found and Net credit sales reported separate from the gross sales on the income statement. Net credit sales mostly provided by the company. You can learn about the definition of Days Sales Outstanding ratio.
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