It depends on industry and payment terms. Among Korean listed companies in 2025, the median was 30 days in retail, 54 in motor vehicles and 60 in pharmaceuticals. Comparing DSO with your own agreed payment terms is the most accurate test.

How do DSO and receivables turnover differ?

They express the same thing. Turnover is collections per year; DSO is days per collection, and DSO = 365 ÷ turnover.

DSO jumped. What should I check?

Check in order whether year-end sales bunched up, whether a new customer got longer terms, and whether any customer is behind on payments. Balances and days outstanding by customer usually reveal the cause.

Which figures are needed?

Revenue from the income statement and trade receivables from the balance sheet.

Days sales outstanding: how long does it take to get paid?

Days sales outstanding (DSO) shows the average number of days between making a credit sale and receiving the cash. When DSO lengthens, cash arrives later even if sales are unchanged, and the business needs more working capital to bridge the gap.

Formula

DSO = trade receivables ÷ revenue × 365

Receivables turnover = revenue ÷ trade receivables (= 365 ÷ DSO)

Turnover counts how many times a year receivables are collected; DSO counts the days per collection. They express the same thing. Caveat uses year-end receivables and 365 days.

Worked example

Figures in units of 100 million KRW. Revenue is 30 and year-end receivables 3 (values calculated by the Caveat engine).

	Prior year	Current year
DSO	35.1 days	36.5 days
Receivables turnover	10.4x	10.0x

Collection takes about 37 days, 1.4 days longer than the year before. When receivables grow faster than sales, DSO lengthens.

Industry benchmarks (2025, Korean listed companies)

DSO distribution from the 2025 financial statements of Korean listed companies, for industries with at least 20 companies.

Industry	25th pct	Median	75th pct	Companies
Food products	26d	33d	45d	40
Chemicals (excl. pharmaceuticals)	35d	44d	57d	112
Pharmaceuticals	40d	60d	86d	107
Electronic components and equipment	40d	55d	76d	167
Machinery and equipment	37d	51d	74d	119
Motor vehicles	40d	54d	68d	71
General construction	27d	53d	87d	27
Wholesale trade	26d	38d	66d	69
Retail trade	13d	30d	41d	24
Publishing (incl. software)	32d	49d	79d	91
Computer programming and IT services	32d	47d	75d	21

Retailers with mostly cash and card sales collect fastest; manufacturers and pharmaceutical companies, whose customers inspect deliveries before paying, take longer. These are listed-company figures, so treat them as a reference range for private SMEs.

How to read it

Against agreed terms: if DSO exceeds the payment terms agreed with customers (for example 60 days after month-end), some customers are paying late.
Trend: a DSO that lengthens year after year matters more than its level.
Against sales growth: receivables growing much faster than revenue may mean looser credit terms were used to win sales, or a customer has stopped paying.

Both sides: a longer DSO is not always bad; granting longer terms to win a large new customer can be a deliberate choice. Conversely, a short DSO can hide concentration risk if most sales go to one or two customers.

Look at these too

Cash conversion cycle (CCC): days of cash tied up across receivables, inventory and payables
Profitable but short of cash: how rising receivables affect cash
Checking a customer's default risk: reviewing the finances of a customer who pays late

Limitations

Year-end balances inflate DSO when sales bunch up just before the balance-sheet date.
Total revenue includes cash sales, so for businesses with many cash sales DSO understates the collection period on credit sales.
Overdue amounts by customer are not visible in financial statements; a receivables ageing report is needed.
For reference only; it does not replace credit, investment or tax decisions.

See it in your own statements

Upload a balance sheet and income statement and Caveat calculates these for your company.

FAQ

What DSO is normal?: It depends on industry and payment terms. Among Korean listed companies in 2025, the median was 30 days in retail, 54 in motor vehicles and 60 in pharmaceuticals. Comparing DSO with your own agreed payment terms is the most accurate test.
How do DSO and receivables turnover differ?: They express the same thing. Turnover is collections per year; DSO is days per collection, and DSO = 365 ÷ turnover.
DSO jumped. What should I check?: Check in order whether year-end sales bunched up, whether a new customer got longer terms, and whether any customer is behind on payments. Balances and days outstanding by customer usually reveal the cause.
Which figures are needed?: Revenue from the income statement and trade receivables from the balance sheet.

Check collection days in my statements →