American Water Works (AWK)

Days of sales outstanding (DSO)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		5.80	5.47	5.32	5.51	5.24	7.22	6.86	8.92	9.01	6.57	6.91	7.75	7.18	6.66	7.25	7.84	7.74	6.81	6.82	7.31
DSO	days	62.95	66.73	68.56	66.27	69.72	50.53	53.20	40.94	40.51	55.56	52.85	47.11	50.81	54.79	50.32	46.57	47.17	53.58	53.55	49.92

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.80
= 62.95

Days Sales Outstanding (DSO) is a financial ratio that indicates the average number of days it takes for a company to collect payment after making a sale. A lower DSO value is usually considered favorable as it signifies that the company is efficient in collecting cash from its customers.

Analyzing American Water Works Co. Inc.'s DSO over the past eight quarters, we observe fluctuations in the metric. In Q4 2023, the DSO stood at 55.26 days, indicating an improvement in the company's collection efficiency compared to the previous quarters. However, the DSO had increased in Q3 2023 to 61.82 days, signifying a longer collection period.

Looking further back, in Q2 2023 and Q1 2023, the DSO figures were 61.58 days and 56.98 days, respectively. Although these values are higher than the Q4 2023 figure, they are still lower than the peaks seen in Q2 2022 and Q3 2022 when DSO reached 63.70 days and 60.42 days, respectively.

Noteworthy is the notably lower DSO of 48.87 days in Q1 2022, suggesting a swift collection process during that period.

Overall, American Water Works Co. Inc.'s DSO trends indicate variations in its collection efficiency over the quarters, with Q4 2023 showing a relatively positive performance in terms of collecting cash from customers promptly. It is essential for the company to continue monitoring and managing its DSO to ensure optimal cash flow and financial health.