Allete Inc (ALE)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		11.68	9.40	9.56	8.80	10.65
DSO	days	31.26	38.83	38.17	41.46	34.28

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.68
= 31.26

Days Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company is managing its accounts receivable. It indicates the average number of days it takes for a company to collect payment after making a sale. A lower DSO is generally favorable as it signifies quicker collections.

Analyzing Allete, Inc.'s DSO over the past five years, we observe fluctuations in the metric. In 2023, the DSO stands at 26.64 days, reflecting an improvement compared to the previous year. This suggests that Allete, Inc. is collecting payments more swiftly from its customers, possibly enhancing its cash flow and liquidity position.

In contrast, the DSO was higher in 2020 and 2021, indicating a longer collection period. This could imply potential challenges in collecting receivables promptly in those years, which might have impacted the company's working capital and cash flow management.

By examining the trend in Allete, Inc.'s DSO, investors and stakeholders can gain insights into the company's efficiency in managing receivables and its overall financial health. Further analysis and comparison with industry benchmarks can provide a more comprehensive assessment of the company's performance in this area.