"Days Sales Outstanding" and "Days to Pay" are two related but distinct financial metrics that provide insights into different aspects of a company's financial operations. Both metrics offer valuable insights into cash flow dynamics and working capital management from different angles, contributing to a comprehensive understanding of a company's financial operations. Days Sales Outstanding measures the average number of days it takes for a company to collect payments from its customers after making sales on credit. It indicates the efficiency of accounts receivable management, reflecting how quickly a company can convert its credit sales into cash receipts. A lower DSO is generally considered better, as it signifies prompt collections and efficient cash flow. DSO is calculated by dividing the total accounts receivable by the net credit sales for a specific period and then multiplying by the number of days in that period. Days to Pay, also known as "Days Payable Outstanding" (DPO), measures the average number of days it takes for a company to pay its suppliers or vendors after receiving invoices from them. It evaluates the company's efficiency in managing its accounts payable. A higher Days to Pay value might indicate that a company is taking longer to settle its payables, potentially preserving cash flow in the short term. However, excessively high DPO could also signal strained relationships with suppliers. Days to Pay is calculated by dividing the accounts payable by the cost of goods sold (COGS) and then multiplying by the number of days in the period.