Operations
Receivables turnover
The reciprocal view of DSO, expressed as the number of times the receivables balance is collected in a period. A DSO of 30.416666666666664 days corresponds to a turnover of 12.000000000000002 times a year.
The Formula
Receivables Turnover = Days / DSO = Revenue / Accounts Receivable
The reciprocal view of DSO, expressed as the number of times the receivables balance is collected in a period. A DSO of 30.416666666666664 days corresponds to a turnover of 12.000000000000002 times a year.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| DSO | Days sales outstanding | days | From the core formula. 30.416666666666664 days in the default example. |
| T | Receivables turnover | times per year | Times per year the balance turns over. 365 divided by 30.416666666666664 is 12.000000000000002. |
What Each Symbol Means
DSOdays
Days sales outstanding
From the core formula. 30.416666666666664 days in the default example.
Ttimes per year
Receivables turnover
Times per year the balance turns over. 365 divided by 30.416666666666664 is 12.000000000000002.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate days sales outstanding page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Days Sales Outstanding, filed under Business. Every number the guide produces comes from substituting into this one line.