Balchem Corporation (BCPC)

Days of sales outstanding (DSO) measures how long it takes for a company to collect its accounts receivable. A lower DSO indicates faster collection of receivables and better liquidity. Balchem Corp.'s DSO has shown a favorable trend over the past five years, decreasing from 52.99 days in 2019 to 49.57 days in 2023. This suggests that the company has been more efficient in collecting payments from customers.

The decrease in DSO indicates that Balchem Corp. has improved its credit and collection policies, leading to quicker conversion of credit sales into cash. This could be attributed to better customer credit evaluation, stricter collection procedures, or improved efficiency in managing accounts receivables.

A lower DSO can positively impact a company's cash flow and working capital management. It indicates that Balchem Corp. may have reduced its exposure to credit risk and potential bad debts. However, it is essential for the company to strike a balance between tightening credit policies and maintaining good customer relationships to sustain healthy sales levels.

Overall, the decreasing trend in Balchem Corp.'s DSO reflects positively on its financial health and efficiency in managing its accounts receivable. This trend is a promising indicator of the company's ability to convert sales into cash promptly.

Peer comparison

Dec 31, 2023