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Days Receivables Outstanding

oboloo Glossary

Days Receivables Outstanding

Days Receivables Outstanding (DRO) can be thought of as the average number of days it takes for a company to turn its accounts receivable into cash. In other words, it is a measure of how efficiently a business is able to collect payment for goods and services sold on credit. DRO is calculated by dividing Accounts Receivable by Total Sales and multiplying by 365. This figure gives an indication of how quickly customers are paying their invoices and should be monitored closely by businesses to ensure they remain in good financial health.

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