The Andersons Inc (ANDE)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 14.72 | 19.34 | 13.74 | 14.92 | 12.12 | |
| DSO | days | 24.79 | 18.87 | 26.57 | 24.46 | 30.12 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 14.72
= 24.79
The Days Sales Outstanding (DSO) is a vital metric that measures how long it takes for a company to collect revenue from its sales. Analyzing The Andersons Inc's DSO over the past five years reveals a trend towards improving efficiency in collecting receivables.
As of December 31, 2020, the company had a DSO of 30.12 days, indicating that it took approximately a month to collect sales revenue. By December 31, 2024, the DSO had decreased to 24.79 days, showcasing a reduction in the collection period.
The fluctuation in DSO values over the years suggests variations in the company's accounts receivable management. The decreasing trend from 2020 to 2024 implies that The Andersons Inc has been more effective in converting sales into cash promptly.
A lower DSO is generally favorable as it signifies a quicker conversion of sales into cash, improving liquidity and cash flow for the company. However, it is essential to ensure that the reduction in DSO is not at the cost of customer relationships or credit policies.
Overall, The Andersons Inc's declining DSO trend reflects an enhanced ability to manage receivables efficiently, potentially leading to improved financial health and operational effectiveness.
Peer comparison
Dec 31, 2024