Smith AO Corporation (AOS)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 7.05 | 6.44 | 6.44 | 5.57 | 4.94 | |
| DSO | days | 51.76 | 56.64 | 56.65 | 65.51 | 73.94 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.05
= 51.76
The days of sales outstanding (DSO) for Smith AO Corporation have shown a declining trend over the past five years, reflecting efficiency in collecting accounts receivable.
On December 31, 2020, the DSO stood at 73.94 days, indicating that, on average, it took the company approximately 74 days to collect outstanding sales. By December 31, 2024, the DSO decreased to 51.76 days, showing an improvement in the collection process.
The decreasing trend in DSO suggests that Smith AO Corporation has been successful in managing its accounts receivable more effectively over the years. This could be attributed to stricter credit policies, prompt follow-ups on overdue payments, or improved customer relationships.
Overall, the declining DSO trend indicates that Smith AO Corporation has been efficient in converting its credit sales into cash, leading to better liquidity and working capital management. This trend is generally perceived positively by investors and stakeholders as it reflects sound financial health and effective credit management practices.
Peer comparison
Dec 31, 2024