Is it good or bad if DSO for a company increases?
DSO stands for days sales outstanding, and measures how many days it takes for a company to collect cash from customers who paid on credit. If DSO increases, that means customers are taking longer to pay.
The company should aim to collect cash as quickly as possible as it allows them to use the cash to fund other areas of the business. In summary, it is “BAD” if DSO increases over time!
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How to calculate days sales outstanding (DSO) or days sales in accounts receivable?
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