AZZ Incorporated (AZZ)
Days of sales outstanding (DSO)
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 17.16 | 8.69 | 8.15 | 8.84 | 7.22 | 6.44 | 4.54 | 2.36 | 3.75 | 4.65 | 5.73 | 6.22 | 6.40 | 6.97 | 8.34 | 7.58 | 7.63 | 5.83 | 6.26 | 5.99 | |
| DSO | days | 21.27 | 42.00 | 44.78 | 41.28 | 50.58 | 56.64 | 80.43 | 154.67 | 97.35 | 78.47 | 63.67 | 58.68 | 57.01 | 52.37 | 43.77 | 48.14 | 47.85 | 62.56 | 58.28 | 60.92 |
February 29, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 17.16
= 21.27
The days of sales outstanding (DSO) is a key metric used to evaluate how efficiently a company is able to collect its accounts receivable. A lower DSO indicates that a company is collecting payments from customers more quickly, which is generally favorable.
Analyzing the trend of AZZ Incorporated's DSO over the provided periods reveals fluctuations in the efficiency of its accounts receivable management.
From February 2020 to November 2020, the DSO decreased from 62.56 days to 52.37 days, indicating an improvement in collecting payments. However, the DSO increased to 57.01 days by February 2021, before declining to 58.68 days by May 2021.
There was a significant increase in DSO to 97.35 days by August 2021, signaling a slowdown in collecting payments from customers. This trend worsened, with DSO reaching 154.67 days by November 2021, which could indicate potential issues in accounts receivable management during this period.
From February 2022 to May 2022, the DSO decreased to 80.43 days, showing some improvement, although it remained relatively high. Subsequently, there was a further decrease in DSO to 56.64 days by August 2022 and then to 50.58 days by November 2022, suggesting better efficiency in collecting payments.
In the most recent periods, the DSO continued to improve significantly, decreasing to 21.27 days by February 2024. This substantial drop in DSO reflects a commendable effort by AZZ Incorporated in accelerating its collections, potentially enhancing its liquidity and cash flow position.
Overall, the fluctuation in AZZ Incorporated's DSO over the analyzed periods indicates varying levels of effectiveness in managing accounts receivable. It is essential for the company to sustain its recent improvement in DSO to ensure steady cash flows and optimize working capital management. Periodic monitoring and analysis of DSO can help identify trends and potential areas for operational enhancement.
Peer comparison
Feb 29, 2024