Ashland Global Holdings Inc (ASH)
Days of sales outstanding (DSO)
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 8.70 | 6.48 | 5.95 | 5.72 | 4.28 | |
| DSO | days | 41.98 | 56.31 | 61.37 | 63.80 | 85.28 |
September 30, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.70
= 41.98
Days Sales Outstanding (DSO) is a measure of how long it takes for a company to collect payment from its customers after making a sale. A lower DSO indicates that a company is collecting its accounts receivable more quickly, which is generally seen as a positive sign of efficiency.
Analyzing Ashland Global Holdings Inc's DSO over the past five years, we observe a decreasing trend from 85.28 days in September 2020 to 41.98 days in September 2024. This improvement indicates that Ashland Global Holdings Inc has been able to collect payments from its customers more efficiently over time.
The decrease in DSO could be attributed to various factors such as improved credit policies, more effective collection efforts, or changes in the customer base. A lower DSO means that the company is able to convert its accounts receivable into cash more quickly, which could potentially improve its cash flow and overall financial health.
It is important to note that while a declining DSO is generally positive, it is also necessary to consider industry benchmarks and compare Ashland Global Holdings Inc's DSO to its competitors to gain a better understanding of its performance in managing accounts receivable. Additionally, monitoring DSO trends over time can provide insights into the company's customer relationships and credit management practices.
Peer comparison
Sep 30, 2024