Axalta Coating Systems Ltd (AXTA)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 4.11 | 4.58 | 4.71 | 4.30 | 5.40 | |
| DSO | days | 88.71 | 79.76 | 77.48 | 84.94 | 67.60 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.11
= 88.71
The days of sales outstanding (DSO) for Axalta Coating Systems Ltd have shown some fluctuations over the past five years. In 2023, the DSO increased to 88.71 days from 79.76 days in 2022, indicating that it took the company longer to collect its accounts receivable in 2023. This may suggest potential issues with the company's credit and collection policies, leading to a slower conversion of sales into cash.
Comparing the DSO to previous years, we observe a general upward trend since 2019, where the DSO stood at 67.60 days. This trend suggests a deterioration in the efficiency of accounts receivable collection over time, which could impact the company's cash flow and working capital management.
It is important for Axalta Coating Systems Ltd to closely monitor and manage its DSO to ensure timely collection of receivables and maintain a healthy cash flow position. The company may need to review its credit terms, collection practices, and customer creditworthiness to address the increasing DSO trend and improve overall financial performance.
Peer comparison
Dec 31, 2023