Days Sales Outstanding (DSO) measures the average number of days a business takes to collect cash payment from customers after a credit sale is completed.
DSO = (Accounts Receivable ÷ Total Credit Sales) × Number of Days
Healthy Benchmark: Compare DSO with the business’s own credit terms and collection historyRead Guide
Days Payable Outstanding (DPO) measures the average number of days a business takes to pay its suppliers and vendors for raw materials or services purchased on credit.
DPO = (Accounts Payable ÷ Cost of Goods Sold) × Number of Days
Healthy Benchmark: A useful DPO range depends on the business model, supplier terms, and payment reliability; compare it with agreed supplier credit periods rather than treating one number as universalRead Guide
The Cash Conversion Cycle (CCC) measures the total length of time (in days) it takes for a business to convert inventory and raw material investments into cash inflows from sales.
CCC = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) - Days Payable Outstanding (DPO)
Healthy Benchmark: Compare CCC trends with the business’s own historical cycle and operating model; a useful range varies significantly by industry and payment termsRead Guide
Debt Service Coverage Ratio (DSCR) measures a company available operating cash flow to pay current debt obligations, including principal repayments and interest expenses.
DSCR = Net Operating Income (EBITDA) ÷ (Annual Principal Repayment + Interest Expense)
Working Capital represents the operational liquidity available to a business, calculated as Current Assets minus Current Liabilities.
Net Working Capital = Current Assets - Current Liabilities | Current Ratio = Current Assets ÷ Current Liabilities
Healthy Benchmark: A current ratio should be interpreted alongside cash-flow timing, inventory quality, receivable collectability, and the business model; no single ratio fits every businessRead Guide
Machine-Readable API
Public Knowledge Base API for AI & Software Engineers
Access standardized financial metrics and MSME definitions programmatically via JSON API endpoints.