What's DSO? And how can we calculate it?

DSO stand for days sales outstanding, it  measures the number of days it takes a company to collect cash from its credit sales.it  shows the liquidity and efficiency of a company's  collection department.In other words, it shows how well a company can collect cash from its customers. The sooner cash can be collected, the sooner this cash can be used for other operations

Theformula is calculated by dividing the ending accounts receivable by the total credit sales for the period and multiplying it by the number of days in the period. Most often this ratio is calculated at year-end and multiplied by 365 days.