Automatic Data Processing Inc (ADP)

Days of sales outstanding (DSO)

		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	Dec 31, 2019	Sep 30, 2019
Receivables turnover		5.60	5.43	5.49	5.90	5.98	5.71	5.43	5.73	5.20	4.95	5.73	5.54	5.50	5.29	5.81	5.85	5.98	5.61	5.59	5.74
DSO	days	65.16	67.16	66.51	61.84	60.99	63.87	67.25	63.68	70.14	73.76	63.69	65.84	66.33	69.05	62.84	62.38	61.08	65.10	65.27	63.59

June 30, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.60
= 65.16

Days Sales Outstanding (DSO) is a financial ratio that measures the average number of days a company takes to collect revenue after a sale has been made. A lower DSO indicates faster collection of receivables and better liquidity management.

Analyzing the DSO trend of Automatic Data Processing Inc over the past several quarters, we observe some fluctuation in the values. The DSO has ranged from a low of 60.99 days to a high of 73.76 days in the last two years. The DSO values for the most recent quarters indicate an upward trend, with values ranging from 65.16 days to 67.16 days, suggesting a slight delay in collecting receivables compared to previous periods.

The increase in DSO could be due to various factors such as changes in credit policies, customer payment behavior, or the timing of invoicing. It is important for the company to monitor and manage its DSO effectively to ensure efficient cash flow management and timely collection of outstanding receivables.

Overall, while the DSO of Automatic Data Processing Inc has shown some variability, it is essential for the company to focus on optimizing its collections process to maintain healthy cash flow levels and ensure timely receipt of payments from customers.