Allegiant Travel Company (ALGT)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		27.79	35.48	21.60	27.26	5.15
DSO	days	13.13	10.29	16.90	13.39	70.86

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 27.79
= 13.13

Based on the data provided, the days of sales outstanding (DSO) for Allegiant Travel Company have shown a decreasing trend over the past few years.

As of December 31, 2020, the DSO was 70.86 days, indicating that on average, it took the company almost 71 days to collect its accounts receivable. However, this figure decreased significantly to 13.39 days by December 31, 2021, suggesting that the company improved its collection efficiency.

Further improvement was observed in the subsequent years, with DSO decreasing to 16.90 days by December 31, 2022, 10.29 days by December 31, 2023, and then to 13.13 days by December 31, 2024. These decreasing DSO values reflect that the company has been more effective in collecting payments from its customers, which is positive as it indicates better liquidity and cash flow management.

Overall, the declining trend in DSO for Allegiant Travel Company signifies that the company has been successful in streamlining its accounts receivable processes and enhancing its working capital management. This may be attributed to stricter credit policies, improved invoicing and collection procedures, or better customer creditworthiness, all of which are essential factors in ensuring the company's financial health and sustainability.