Allete Inc (ALE)

Days of sales outstanding (DSO)

		Dec 31, 2024	Sep 30, 2024	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
Receivables turnover		8.73	11.46	11.57	12.08	11.68	15.91	15.52	14.56	9.40	12.81	12.92	12.36	9.56	12.17	12.25	10.54	8.80	12.54	13.38	12.02
DSO	days	41.83	31.85	31.54	30.21	31.26	22.94	23.51	25.06	38.83	28.49	28.26	29.53	38.17	30.00	29.79	34.62	41.46	29.12	27.29	30.36

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.73
= 41.83

Days Sales Outstanding (DSO) is a liquidity ratio that indicates the average number of days it takes for a company to collect revenue after making a sale. A lower DSO value is desirable as it signifies a shorter time frame for collecting receivables, which can improve cash flow and working capital management.

Analyzing the DSO trend for Allete Inc based on the provided data reveals fluctuations over the quarters. The DSO values ranged between 22.94 days to 41.83 days during the period from March 31, 2020, to December 31, 2024.

In the initial quarters, the DSO figures were relatively stable around 30 days, indicating consistent collection of receivables. However, there was a notable spike in DSO to 41.46 days by December 31, 2020, suggesting a potential delay in collecting receivables during that period.

Subsequently, the company managed to reduce the DSO to below 30 days for several quarters, indicating improvements in its collection efficiency. This trend signifies that Allete Inc was able to effectively manage its accounts receivable and collect payments more promptly.

However, towards the end of the analyzed period, there was another increase in DSO, reaching 41.83 days by December 31, 2024. This elevation could indicate challenges in collecting receivables efficiently, which might impact the company's cash flow and liquidity position.

Overall, a comprehensive assessment of Allete Inc's DSO trend highlights fluctuations in the efficiency of its accounts receivable management over the quarters. Monitoring and addressing the factors influencing DSO fluctuations can be crucial for optimizing cash flow and maintaining sound liquidity levels for the company.