Aecom Technology Corporation (ACM)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 4.68 | 4.54 | 4.13 | 3.86 | 3.88 | |
| DSO | days | 78.07 | 80.43 | 88.32 | 94.44 | 94.10 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.68
= 78.07
Days Sales Outstanding (DSO) is a crucial financial ratio used to evaluate the efficiency of a company's accounts receivable management. A lower DSO indicates that the company is collecting payments from its customers more quickly, while a higher DSO suggests delayed collections and potential liquidity issues.
AECOM's DSO has shown fluctuations over the last five years, as follows:
- In 2019, the DSO was 64.52 days, portraying an efficient collections process.
- In 2020, the DSO increased to 79.99 days, indicating a delayed collection of sales, potentially affecting the company's cash flow and liquidity position.
- In 2021, the DSO decreased to 73.78 days, but remained higher than the 2019 level, signifying continued challenges in collecting payments from customers.
- In 2022, the DSO decreased further to 66.82 days, reflecting an improvement in the collections process compared to the previous year.
- In 2023, the DSO decreased again to 64.96 days, approaching the level observed in 2019, which is a positive sign for the company's cash flow and liquidity.
Overall, the trend in AECOM's DSO indicates fluctuations in the efficiency of its accounts receivable management. While there have been fluctuations, the recent decrease in DSO is a positive signal, suggesting an improvement in the company's ability to collect payments from customers more quickly. However, it is crucial for the company to continue focusing on managing its accounts receivable efficiently to ensure healthy cash flow and liquidity.
Peer comparison
Sep 30, 2023