Amazon.com Inc (AMZN)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		11.50	10.94	12.07	14.23	15.67
DSO	days	31.75	33.36	30.24	25.65	23.30

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 11.50
= 31.75

To analyze Amazon's Days Sales Outstanding (DSO) over the past five years, we can see a gradual increase in the DSO metric:

1. As of December 31, 2020, Amazon's DSO stood at 23.30 days. This indicates that on average, Amazon took approximately 23.30 days to collect its accounts receivable.

2. By December 31, 2021, the DSO had increased to 25.65 days, showing a slight uptick in the time it took for Amazon to collect revenues from its customers.

3. The trend continued with further growth in DSO, reaching 30.24 days by December 31, 2022. This suggests a potential delay in collecting receivables, which can impact cash flow and working capital management.

4. The DSO figure climbed to 33.36 days by December 31, 2023, signifying a prolonged collection period for Amazon's sales, which might raise concerns about the company's credit policies and effectiveness of accounts receivable management.

5. However, there was a slight decrease in DSO to 31.75 days as of December 31, 2024, compared to the previous year. While this reduction is a positive sign, the metric remains at a higher level compared to the starting point in 2020.

Overall, the upward trend in DSO over the past five years indicates a potential challenge for Amazon in efficiently converting its sales into cash. It is essential for the company to closely monitor and manage its accounts receivable collection processes to ensure optimal cash flow and overall financial health.