Rising DSO means either customers are paying more slowly or sales are being pulled forward on generous terms. Both consume cash, and the second is a classic precursor to a revenue disappointment once the terms normalise.
Compare within an industry and adjust for mix: a shift toward large enterprise customers naturally lengthens DSO, while a shift toward consumer sales shortens it. The footnotes usually reveal which is happening.
Example: Northwind Tools has $95M of receivables on $840M of revenue, 41 days, against 35 a year earlier. The six-day stretch absorbed roughly $14M of cash.
Related: accounts-receivable, cash-conversion-cycle, earnings-quality, days-payable-outstanding, channel-stuffing