Altair Engineering Inc (ALTR)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 2.94 | 3.10 | 3.53 | 3.68 | 4.09 | |
| DSO | days | 124.29 | 117.60 | 103.34 | 99.24 | 89.28 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 2.94
= 124.29
Altair Engineering Inc's Days Sales Outstanding (DSO) has been on an upward trend over the past five years, indicating that the company is taking longer to collect its accounts receivable. The DSO increased from 89.28 days in 2019 to 124.29 days in 2023. This suggests a deterioration in the company's collection efficiency.
The DSO is a measure of how long it takes a company to collect payment from its customers after making a sale. A higher DSO can indicate potential issues with credit policies, collection procedures, or customer payment behavior. In Altair Engineering Inc's case, the increasing trend in DSO may raise concerns about the company's liquidity and cash flow management.
It is important for Altair Engineering Inc to closely monitor its accounts receivable management and collection processes to reduce DSO and improve cash flow. This could involve implementing stricter credit policies, improving invoicing and collection procedures, or addressing any underlying issues with customer payment delays.
Overall, the increasing DSO trend for Altair Engineering Inc should be carefully analyzed and addressed to ensure the company's financial health and stability in the long run.
Peer comparison
Dec 31, 2023