AGCO Corporation (AGCO)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 8.73 | 8.98 | 20.71 | 22.46 | 21.36 | |
| DSO | days | 41.82 | 40.67 | 17.63 | 16.25 | 17.09 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.73
= 41.82
AGCO Corporation's days of sales outstanding (DSO) measures the average number of days the company takes to collect payment after making a sale. Analyzing the DSO trend from December 31, 2020, to December 31, 2024, reveals fluctuations in the efficiency of AGCO's accounts receivable management.
Initially, in December 2020, AGCO Corporation had a DSO of 17.09 days, indicating a relatively efficient collection process. By December 2021, the DSO decreased slightly to 16.25 days, potentially reflecting improved collection practices or customer payment behavior.
However, in subsequent years, there was a significant increase in DSO. By December 2022, the DSO rose to 17.63 days, suggesting a potential slowdown in collections compared to the previous year. The most notable change occurred by December 2023 and December 2024, with DSO soaring to 40.67 days and 41.82 days, respectively. These sharp spikes in DSO may indicate challenges in collecting payments promptly, potentially impacting cash flow and liquidity.
The increasing trend in DSO over the years highlights the importance of AGCO Corporation's accounts receivable management. The company may need to review its credit policies, customer invoicing processes, and collection strategies to shorten the collection period and enhance overall working capital efficiency.
Peer comparison
Dec 31, 2024