• Originally published: 29/08/2019 07:28
Last version published: 13/04/2020 09:01
Publication number: ELQ-97512-6
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# DSO - DPO - DIO computation and graph - Countback method (Includes countforward method!)

DSO (Days Sales Outstanding)/ DPO (Days Payable Outstanding)/ DIO (Days Inventory Outstanding) charts countback method.

Description

You will simply need to input your monthly inventory, trade receivables and trade payables value along with Revenue, COGS and purchases. Once this is done, that's it! You can now look at your different trends and start getting insights from your data.

For those of you who would like to analyse DIO on a product by product basis, the template already includes the possibility to analyse DIO on 10 products at once.

What I offer in this tool is one of the cleanest and clearest way to compute DSO DIO and DPO using the countback method. Here is how I proceeded in 3 simple steps:
- First the model calculates the number of full months of sales (for DSO) included in Trade receivables.
- Then it calculates the pro-rata it should apply for the last partial month
- Finally it multiply each month (partial or complete) by the number of days in this given month

For Inventory, I offer two ways to calculate DIO.
1. The first is on past purchases which will give you an indication of how many days a purchase remains in inventory.
2. The second is on future COGS, which should give you a good indication on how good your inventory management / forecast process is

This Best Practice includes a summary tab with 4 nice charts which showcase the monthly movement of the balance sheet elements (TP, TR, Inventory) along with DSO DIO DPO.

This Best Practice includes
1 Excel file

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## Further information

### Objectives

Understand monthly generation / need of cash driven by each key element of the working capital

### Use it if

Balance Sheet analysis, Cash generation analysis

## Reviews

• (last updated: 21/05/2021 17:13)

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## Any questions on DSO - DPO - DIO Computation And Graph - Countback Method (Includes Countforward Method!)?

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