Days Inventory Outstanding (SM.DSI) is an efficiency ratio that measures the average number of days the company holds its inventory before selling it. The ratio measures the number of days funds are tied up in inventory. It can be shown as- “ 365 days / Inventory turnover ratio (SM.Inv_Turn)” .
Days Payable Outstanding (DPO) (SM.DPO) measures the average number of days it takes a company to pay its suppliers. It can be shown as- “ 365 days / Accounts payable turnover ratio (SM.Pay_Turn)”.
Days Sales Outstanding (DSO) (SM.DSO) measures the average number of days it takes a company to collect its receivables after a sale. Optimum DSO varies by industry. It can be represented as- “365 days / Accounts receivable turnover ratio (SM.Rec_Turn) “.
