AbbVie Inc (ABBV)

Days of sales outstanding (DSO)

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		4.87	4.83	4.88	4.95	5.16	5.38	5.10	5.29	5.63	5.94	5.42	5.24	5.19	4.83	4.34	5.35	6.13	5.94	5.95	5.75
DSO	days	74.96	75.54	74.87	73.80	70.76	67.82	71.52	69.06	64.80	61.40	67.35	69.72	70.30	75.57	84.17	68.18	59.56	61.40	61.33	63.50

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.87
= 74.96

Days Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company is managing its accounts receivable. It measures the average number of days it takes for a company to collect payment after a sale has been made. A higher DSO value indicates that the company is taking longer to collect payments from customers, which may have implications for cash flow and liquidity.

Analyzing Abbvie Inc's DSO over the past eight quarters, we observe a steady increase from Q1 2022 to Q4 2023. The DSO values have ranged from a low of 67.82 days in Q3 2022 to a high of 75.54 days in Q3 2023. This upward trend suggests that Abbvie Inc may be experiencing challenges in collecting payments from customers in a timely manner.

A higher DSO could indicate potential issues with customer creditworthiness, collection processes, or changes in sales terms. It may also suggest that the company is providing longer payment terms to customers, which could tie up cash flow and potentially lead to liquidity concerns.

It is important for Abbvie Inc to closely monitor its DSO and implement strategies to improve collections efficiency, such as tightening credit policies, enhancing collection processes, or incentivizing early payments. By effectively managing DSO, Abbvie Inc can optimize cash flow, strengthen liquidity, and enhance overall financial performance.