What are Days Sales Outstanding, and what is indicated when days outstanding grows?

"Days Sales Outstanding is an important metric that measures the health of Accounts Receivable. The metric indicates how many days of sales are hung up in accounts receivable at any given time. A growing balance indicates that there may be some issues with collections, which could lead to cash flow problems in the near future. Given this, collections should be monitored closely and adjusted accordingly, if DSO is growing."

Days sales outstanding (DSO) is a measure of the average number of days that it takes a company to collect payment for a sale. A growing balance indicates that there may be some issues with collections, which could lead to cash flow problems.