The Days Sales In Receivables Ratio (DSI) measures a company’s ability to efficiently collect its receivables. By calculating the average number of days it takes to receive payment, this metric provides a useful snapshot of the financial health of a business in terms of its liquidity. In other words, this ratio offers insight into how much cash on hand is available to a company to use for daily operations, investment and growth opportunities. Employing the DSI can help companies make informed decisions about their customers, suppliers and debtors more effectively.
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