Arrow Electronics Inc (ARW)

Days Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company is managing its accounts receivable. It measures the average number of days it takes for a company to collect payment after making a sale.

Analyzing the DSO trend of Arrow Electronics Inc over the years reveals some notable insights.

1. In 2020, the DSO stood at 117.18 days. This indicates that, on average, it took Arrow Electronics approximately 117 days to collect payments from its customers for goods or services sold during that year.

2. The DSO slightly increased to 117.77 days in 2021, suggesting a marginal deterioration in the company's collection efficiency compared to the previous year.

3. The trend continued in 2022 with a DSO of 121.15 days, indicating a further extension in the collection period. This increase may raise concerns about the company's credit policies or the effectiveness of its accounts receivable management.

4. By 2023, the DSO rose significantly to 134.92 days, signaling a notable delay in collecting payments from customers. A higher DSO could impact the company's cash flow and liquidity position.

5. The DSO peaked at 170.33 days in 2024, indicating a substantial increase in the collection period. This significant rise could raise questions about Arrow Electronics' credit risk exposure and the effectiveness of its receivables management strategies.

In conclusion, the increasing trend in Arrow Electronics' Days Sales Outstanding over the years suggests potential challenges in efficiently collecting payments from customers. It is essential for the company to closely monitor and address factors impacting DSO to ensure healthy cash flow and overall financial performance in the future.

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Dec 31, 2024