What Is DSO in Financial Terms?
DSO stands for Days Sales Outstanding, a critical financial metric used to measure how quickly a company collects revenue after a sale. It’s a key indicator of cash flow health.
Why Understanding DSO Matters
Understanding DSO is essential for assessing a company’s liquidity. Lower DSO values indicate efficient cash flow management, while higher values may signal potential collection issues. Companies track DSO closely to improve financial planning and ensure steady cash flow.
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