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Receivables: DSO and collection effectiveness
Track how fast customers pay and how much of what was collectable was collected each month.
Finance & unit economicsHow it's worked out
- DSO = closing receivables ÷ credit sales × days. CEI = (opening AR + credit sales − closing AR) ÷ (opening AR + credit sales − closing current AR)
- Credit sales only; current means not yet past due
NoteA rising DSO with a falling CEI means collections are slipping, not just that sales grew. CEI near 100% means almost everything collectable was collected.
Source: Credit Research Foundation, collection effectiveness index
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