Ashland Global Holdings Inc (ASH)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.48 | 5.95 | 5.72 | 4.28 | 4.47 | |
| DSO | days | 56.31 | 61.37 | 63.80 | 85.28 | 81.73 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.48
= 56.31
To analyze Ashland Inc's days of sales outstanding (DSO) over the past five years, we can identify trends and assess the company's effectiveness in managing its accounts receivable.
From 2019 to 2023, Ashland Inc's DSO has shown a decreasing trend, indicating an improvement in the collection of accounts receivable. This reflects the company's ability to convert its credit sales into cash more efficiently.
The decline in DSO from 70.42 days in 2019 to 56.31 days in 2023 indicates that the company has been able to collect its receivables more quickly over the years. This improvement may be attributed to various factors, including tighter credit policies, improved collection processes, or a shift in customer payment behavior.
A decreasing DSO implies that Ashland Inc has been managing its credit sales and collection process effectively, which ultimately contributes to healthier cash flows and working capital management. It also signifies potential strengths in the company's customer relationships and credit management practices.
Overall, the lowering trend in DSO is a positive indication of Ashland Inc's efforts in managing its receivables, enhancing liquidity, and potentially reducing credit risk. However, continued monitoring is essential to ensure sustained efficiency in accounts receivable management.
Peer comparison
Sep 30, 2023