Aramark Holdings (ARMK)

Days of sales outstanding (DSO)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		8.92	10.10	7.78	7.37	7.22	7.42	7.34	7.07	6.87	6.76	7.17	6.83	7.23	8.69	9.90	8.61	8.22	9.06	8.91	8.67
DSO	days	40.94	36.12	46.93	49.55	50.58	49.18	49.70	51.62	53.16	54.00	50.92	53.42	50.47	42.00	36.88	42.37	44.39	40.30	40.97	42.08

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.92
= 40.94

The Days of Sales Outstanding (DSO) ratio indicates the average number of days it takes for a company to collect payment after making a sale. A lower DSO typically signifies a more efficient accounts receivable management process.

Analyzing the DSO trend for Aramark Holdings from Dec 2019 to Dec 2023 reveals fluctuations in the company's collection efficiency. The DSO ranged from a low of 36.12 days in Sep 2023 to a high of 54.00 days in Sep 2021. Over the period, the DSO has shown some volatility, with peaks and troughs indicating potential challenges or improvements in receivables management.

Notably, the DSO decreased from 53.16 days in Dec 2023 to 40.94 days in Sep 2023, reflecting an improvement in collecting payments more promptly. This reduction in DSO suggests that Aramark Holdings may have enhanced its credit policies, streamlined its collections process, or experienced a lower level of outstanding receivables in recent months.

However, it is essential to monitor future DSO changes to assess the sustainability of this improvement in accounts receivable efficiency. A continued decrease in DSO could indicate ongoing effective collections management, while an increase might signal potential challenges in collecting payments promptly.

Overall, the DSO analysis provides insights into Aramark Holdings' ability to manage its accounts receivable effectively and highlights areas where the company may have room for enhancement in its working capital management.