Convert receivables into the average number of days customers take to pay.
Dividing a balance-sheet stock by the daily flow that passes through it converts money into days. The turns figure is the same relationship inverted: how many times the balance is replaced over the period. Days measures are directly comparable across businesses of any size, and each day removed from the collection cycle releases cash without needing new financing.
Days Sales Outstanding
Days Sales Outstanding = Accounts receivable ÷ Annual revenue × days in period
Days Sales Outstanding = Accounts receivable ÷ Annual revenue × days in period Dividing a balance-sheet stock by the daily flow that passes through it converts money into days. The turns figure is the same relationship inverted: how many times the balance is replaced over the period.
Days measures are directly comparable across businesses of any size, and each day removed from the collection cycle releases cash without needing new financing.
This calculator takes 3 inputs: Accounts receivable, Annual revenue, Days in the period. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.