Which do you use more often/find more value in analyzing? A/R Turnover DSO DDSO
Accounts Receivable Turnover
Answers
Wayne,
I'm old fashioned. DDSO just gets marked against my reserve for delinquents.
A/R turns, unless you fiddle it, needs help. In any case it isn't always helpful in explaining to
DSO tells the story at its most basic, and then dig for details from there.
Cheers,
KP
DSO-using the sales deduction method (i.e. at 9/30, the first 30 days is represented by Sept sales, if any AR balance remains, deduct Aug sales=30 days, etc.)
DSO is still best in my mind. You can always fine tune the calc, but we just use one month of activity to measure against. I have used the countback methodology in the past, which is very exact. I prefer that, but if you have good working capital management, this is just a look in the rearview mirror
Filed Under:
Accounting