Atmos Energy Corporation (ATO)

Days of sales outstanding (DSO)

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Receivables turnover		12.48	11.19	9.94	12.23	12.59
DSO	days	29.25	32.63	36.74	29.83	29.00

September 30, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 12.48
= 29.25

Days of Sales Outstanding (DSO) represents the average number of days it takes for a company to collect payment after making a sale. A lower DSO indicates that the company is collecting payments more quickly, which can be a positive sign of efficient accounts receivable management.

Analyzing the DSO trend for Atmos Energy Corp. from 2019 to 2023, the following insights can be gleaned:

1. There was a notable decrease in DSO from 2021 to 2023, indicating improved efficiency in collecting receivables. The DSO decreased from 36.74 days in 2021 to 28.06 days in 2023, reflecting a positive trend in the company's accounts receivable management.

2. The DSO was relatively consistent in 2019, 2020, and 2023, with minor fluctuations. This suggests that the company has maintained a stable collection period over these years.

3. The peak DSO was observed in 2021 at 36.74 days, indicating a longer collection period for receivables. However, the subsequent decrease in 2023 signals that the company made efforts to improve its receivables management.

Overall, the decreasing trend in DSO from 2021 to 2023 demonstrates an enhancement in the efficiency of Atmos Energy Corp.'s accounts receivable collection process. A lower DSO implies that the company is converting its sales into cash more rapidly, which can have a positive impact on cash flow and working capital management. This trend suggests that the company has been successful in managing its credit and collections processes effectively.