# How To Calculate Days Sales Outstanding in Oracle | Arithmix

Learn how to calculate Days Sales Outstanding (DSO) in Oracle with our comprehensive guide. Improve your financial analysis skills and optimize your business operations with this step-by-step tutorial.

Calculating Days Sales Outstanding (DSO) is an important metric for any business. It helps measure the average time it takes for a company to collect payment from its customers. This metric is particularly useful for businesses that offer credit terms to their customers. By calculating DSO, businesses can gain insights into their cash flow and identify areas where they can improve their collections process.

## What Is Days Sales Outstanding?

Days Sales Outstanding (DSO) is a financial metric that measures the average number of days it takes for a company to collect payment from its customers after a sale has been made. It is calculated by dividing the total accounts receivable by the total credit sales for a given period and multiplying the result by the number of days in that period.

For example, if a company has \$100,000 in accounts receivable and \$500,000 in credit sales for a 30-day period, the DSO would be calculated as follows:

DSO = (100,000 / 500,000) x 30 = 6 days

This means that on average, it takes the company six days to collect payment from its customers after a sale has been made.

## When Is It Valuable To Calculate Days Sales Outstanding?

Calculating DSO is valuable for any business that offers credit terms to its customers. It can help businesses identify areas where they can improve their collections process and reduce the time it takes to collect payment. This, in turn, can help improve cash flow and reduce the risk of bad debt.

DSO is also a useful metric for investors and lenders who are evaluating a company's financial health. A high DSO can indicate that a company is having difficulty collecting payment from its customers, which could be a red flag for investors and lenders.

Overall, calculating DSO is a simple yet powerful way for businesses to gain insights into their cash flow and identify areas where they can improve their collections process. By keeping a close eye on this metric, businesses can ensure that they are getting paid on time and maintain a healthy financial position.

## How Do You Calculate Days Sales Outstanding in Oracle

Oracle itself isn’t naturally geared towards letting you calculate complex metrics like Days Sales Outstanding. As an alternative, teams typically use products like Arithmix to import data from Oracle and build out dashboards.

## What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Oracle, combine it with data from other systems, and create calculations like Days Sales Outstanding.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.