American Airlines Group (AAL)

Days of sales outstanding (DSO)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Receivables turnover		26.75	28.74	24.96	24.53	24.85	25.10	24.48	25.23	21.97	21.75	21.17	21.39	18.66	17.38	14.00	12.22	12.28	20.94	37.05	42.04
DSO	days	13.65	12.70	14.62	14.88	14.69	14.54	14.91	14.47	16.61	16.78	17.25	17.06	19.56	21.00	26.07	29.87	29.71	17.43	9.85	8.68

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 26.75
= 13.65

Days Sales Outstanding (DSO) is a key financial ratio that measures how long it takes for a company to collect its accounts receivable. A lower DSO indicates that the company is collecting payments from customers more quickly, which is generally a positive sign as it improves cash flow and liquidity.

Analyzing American Airlines Group's DSO over the past few years, we observe a fluctuating trend. From March 31, 2020, to June 30, 2021, the DSO increased steadily, indicating a slower collection of accounts receivable during this period. This elongated collection period could be attributed to various factors like changes in customer payment behavior or credit policies.

However, from September 30, 2021, onwards, the DSO started to decrease, reaching a more optimal range of around 14-17 days by December 31, 2023. This downward trend suggests that American Airlines Group has improved its accounts receivable collection efficiency, possibly through better credit management practices or enhanced invoicing and payment processes.

Notably, the DSO showed a slight uptick by June 30, 2024, to 14.62 days but remained relatively stable compared to previous years. This stability indicates that American Airlines Group has been able to maintain a healthy balance in collecting receivables efficiently while not compromising customer relationships or sales growth.

Overall, the improving trend in DSO from 2021 to 2023 reflects positively on American Airlines Group's ability to manage its accounts receivable effectively, potentially enhancing its financial health and operational efficiency. Monitoring this ratio over time will be crucial to ensure continued strong performance in receivables management.