Applied Materials Inc (AMAT)

Days of sales outstanding (DSO)

		Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020
Receivables turnover		5.08	4.71	3.92	4.12	5.43
DSO	days	71.91	77.48	93.13	88.68	67.25

October 27, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.08
= 71.91

Days Sales Outstanding (DSO) is a key metric used to assess how efficiently a company is managing its accounts receivable. Applied Materials Inc's DSO has shown fluctuations over the past five years. In 2024, the company's DSO was 71.91 days, indicating that, on average, it takes almost 72 days for the company to collect its accounts receivable. This represents an improvement compared to the previous year's DSO of 77.48 days.

Analyzing further, in 2022, Applied Materials Inc's DSO was 93.13 days, demonstrating a prolonged collection period compared to both 2024 and 2023. The company's performance in 2021 also saw a decline in efficiency, with a DSO of 88.68 days. Notably, in 2020, the company experienced a lower DSO of 67.25 days, indicating a comparatively better collection efficiency than the following years.

Overall, Applied Materials Inc's DSO has varied over the past five years, with fluctuations likely influenced by factors such as the company's credit policies, industry payment norms, and changes in customer payment behavior. Monitoring DSO trends can help assess the company's liquidity, credit risk, and efficiency in managing accounts receivable.