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Adaptive Planning
Example: Calculate Common Financial Ratios

Example: Calculate Common Financial Ratios

Days Sales Outstanding

For simplicity, the examples use comma separators for terms. Some browser settings require you to use semicolon separators.
Days sales outstanding (DSO) is used to calculate the average collection period. DSO is a financial ratio that illustrates how well a company's accounts receivables are being managed.
Accounts needed include:
Account Name
Account Code
Account Type
Accounts Receivable (Rollup)
AccountsReceivable
Current Asset - cumulative
Income
Income
Income - periodic
Calendar Days in Month
CalendarDaysInMonth
Assumption - periodic
Formula:
DIVF(ACCT.AccountsReceivable, ACCT.Income)*ASSUM.CalendarDaysInMonth

Days Payable Outstanding

Days payable outstanding (DPO) is the ratio of payables to the daily average cost of sales.
Accounts needed include:
Account Name
Account Code
Account Type
Accounts Payable (Rollup)
AccountsPayable
Current Liability - cumulative
Cost of Goods Sold
CostOfGoodsSold
Cost of Goods Sold - periodic
Calendar Days in Month
CalendarDaysInMonth
Assumption - periodic
Formula:
DIVF(ACCT.AccountsPayable, ACCT.CostOfGoodsSold)*ASSUM.CalendarDaysInMonth

Inventory Turnover Ratio

The speed with which a company can sell inventory is a critical measure of business performance. A low turnover implies weak sales and, therefore, excess inventory. A high ratio implies either strong sales and/or large discounts.
Accounts needed include:
Account Name
Account Code
Account Type
Cost of Goods Sold
CostOfGoodsSold
Cost of Goods Sold - periodic
Inventory
Inventory
Current Asset - cumulative
Formula:
DIVF(ACCT.CostOfGoodsSold, ACCT.Inventory)