Days Receivables Outstanding measures the number of days on average it takes a company to collect cash generated from sales. This represents the average number of days between invoicing a customer and collecting payment.
Calculation
| Days Receivables Outstanding |
| = |
| Accounts Receivable |
× 365 days |
| Revenue |
|
where:
- Accounts Receivable = Average Accounts Receivables (= average of beginning and ending receivables)
- Revenue = Annual Revenue
Unit of measure: Days (Calendar days)
Importance
A lower number of days indicates a better asset efficiency and cashflow.
Notes
Alternative names: Days Sales Outstanding.
Statement of Financial Position
Community Importance
Rating:
Hierarchy
| ID | Name | Level | x | | AE1 | Cash Conversion Cycle | 1 | AE1 |
| AE11 | Days Receivables Outstanding | 2 | AE11 |
| AE111 | On-time Receipts Ratio | 3 | AE111 |
| AE112 | Late Receipts Ratio | 3 | AE112 |
| AE113 | Uncollectable Receivables Ratio | 3 | AE113 |
Term(s)
| ID | Name | Clear | x | | AR | Accounts Receivable | | AR |
| CSFP | Statement of Financial Position | | CSFP |
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