Accounting Analytics

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Below are the top discussions from Reddit that mention this online Coursera course from University of Pennsylvania.

Offered by University of Pennsylvania. Accounting Analytics explores how financial statement data and non-financial metrics can be linked to ... Enroll for free.

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Taught by
Brian J Bushee
The Geoffrey T. Boisi Professor
and 1 more instructor

Offered by
University of Pennsylvania

Reddit Posts and Comments

0 posts • 1 mentions • top 1 shown below

r/Accounting • post
2 points • ghostofgbt
Understanding DSO (Days Sales Outstanding)


I'm in the process of writing a financial application and am attempting to automate the calculation of days sales outstanding for the purposes of identifying revenue manipulation in public companies. I'm using a model similar to what this course teaches:

I'm somewhat confused though. In the calculation for days receivable in the above video (around 6 min in) , the professor uses a formula of

Days Receivable = (Average AR over the past 5 quarters / TT Revenue)*365.

My question is why is he using the past 5 quarters instead of the past 4? Don't we want the average AR over the same period we are using to calculate TTM revenue (e.g. the past 4 quarters)?

I'm not an accountant so I might be missing something, but is it possible this is a mistake in the professor's presentation? It changes the DSO somewhat significantly in my calculations and I'm not sure which one is right or why I should be averaging 5 quarters of AR to divide by only 4 quarters of revenue.