AAR Corp (AIR)
Days of sales outstanding (DSO)
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 7.91 | 8.20 | 8.49 | 9.76 | 12.00 | |
| DSO | days | 46.12 | 44.54 | 43.01 | 37.40 | 30.42 |
May 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.91
= 46.12
The Days Sales Outstanding (DSO) ratio for AAR Corp has shown a consistent upward trend over the past five years. In particular, the DSO increased from 30.42 days in 2020 to 46.12 days in 2024, indicating a lengthening collection period for accounts receivable. This suggests that AAR Corp is taking longer to collect payments from its customers, which may impact its cash flow and liquidity.
The average collection period increased from 37.07 days in 2020 to 44.14 days in 2024. This indicates that, on average, it took AAR Corp longer to convert its accounts receivable into cash over the five-year period. A higher DSO may also indicate potential issues with credit risk management or customer payment delays.
It is important for AAR Corp to closely monitor and manage its DSO to ensure efficient cash flow management and timely collection of receivables. They may need to review their credit policies, collection procedures, and customer relationships to address any underlying issues contributing to the increase in DSO over the years.
Peer comparison
May 31, 2024