American Water Works (AWK)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		6.15	5.80	5.23	9.01	7.17
DSO	days	59.30	62.93	69.78	40.50	50.93

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.15
= 59.30

Based on the data provided, American Water Works' Days of Sales Outstanding (DSO) has fluctuated over the five-year period:

- In December 31, 2020, the DSO was 50.93 days, indicating that on average, it took the company around 50.93 days to collect its accounts receivable.
- By December 31, 2021, the DSO improved to 40.50 days, suggesting a more efficient collection of receivables.
- However, there was a notable increase in DSO by December 31, 2022, reaching 69.78 days, which indicates a potential delay in collecting payments from customers.
- The DSO decreased slightly by December 31, 2023 to 62.93 days but remained higher compared to the previous year.
- In December 31, 2024, the DSO improved to 59.30 days, showing a better performance in collecting accounts receivable compared to the year before.

Overall, American Water Works' DSO has shown some fluctuations over the years, with efforts needed to manage the collection of accounts receivable more effectively to ensure timely receipt of payments and maintain healthy cash flows.