Arrowhead Pharmaceuticals Inc (ARWR)

Days of sales outstanding (DSO)

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Receivables turnover		—	—	172.50	13.48	104.01
DSO	days	—	—	2.12	27.07	3.51

September 30, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ —
= —

Days Sales Outstanding (DSO) is a measure of how long it takes a company to collect revenue after a sale is made. A lower DSO indicates faster collections and more efficient cash flow management.

Looking at the historical trend of Arrowhead Pharmaceuticals Inc's DSO, we observe significant fluctuations. In 2022, the DSO was exceptionally low at 2.12 days, implying that the company was very efficient in collecting sales revenue. This could be attributed to effective credit management or quick invoice processing.

In 2021, the DSO increased substantially to 27.07 days, indicating a significant delay in collecting sales revenue. This might signal potential issues with customer payments or a shift in payment terms that affected cash flows.

In 2020, the DSO was 3.51 days, which was relatively lower compared to 2021, but higher than 2022. This suggests that the company improved its collection efficiency compared to the prior year but was not as effective as in 2022.

It is essential for Arrowhead Pharmaceuticals Inc to monitor and manage its DSO closely to ensure timely collection of revenues and maintain healthy cash flow levels. Efforts to optimize credit policies, streamline invoicing processes, and closely monitor customer payments could help improve DSO performance in the future.