The Best Possible Days Sales Outstanding calculator computes the Best Possible Days Sales Outstanding based on the Current Receivables, Days in Period and the Total Credit Sales.
INSTRUCTIONS: Choose units and enter the following:
- (CR) Current Receivables
- (DiP) Days in Period
- (TCS) Total Credit Sales.
Best Possible Days Sales Outstanding (BPDSO): The calculator returns the number of days. However, this can be automatically converted to compatible units via the pull-down menu.
The Math / Science
Best Possible Days Sales Outstanding gives useful insight into delinquencies, as it considers only Current Receivables, those aged 30 days and less.
The nearer the result is to standard DSO, the more effective a company is in dealing with slow payers.
Typical days in period are 360 or 365.
The formula for the Best Possible Days Sales Outstanding is:
BPSO = CR / TCS. * DiP
where:
- BPSO is the Best Possilbe Days Sales Outstanding
- CR is Current Receivables
- TCS is Total Credit Sales
- DiP is Days in Period.
The Accounting Ratio Calculator provides numerous standard equations used in business accounting, including the following:
- Best Possible Days Sales Outstanding - gives useful insight into delinquencies, as it considers only Current Receivables.
- Current Ratio - A liquidity ratio that measures the ability to pay short-term liabilities.
- Days Sales Outstanding - tests the efficiency of the conversion of receivables into cash.
- Debt to Equity Ratio - measures how a company is leveraging its debt against the resources of its owners.
- Inventory Turnover Ratio - reveals how many times inventory turns over in a period
- Net Cash Flow from Operations - Net income - Increase in Receivables + Increase in Payables.
- Quick Assets - cash and assets that can be converted quickly to cash
- Quick Ratio (aka Acid Test) - measures the ability to pay short-term liabilities with cash and assets quickly convertible to cash
- Stockholder's Equity - sum of Common Stock at Par, Premium on Common Stock, Preferred Stock at Par, Premium on Preferred Stock and Retained Earnings