Benchmark Electronics Inc (BHE)

Days of sales outstanding (DSO)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Receivables turnover		6.44	7.23	7.31	6.76	6.32	6.05	6.09	6.38	5.87	5.78	5.75	6.25	6.33	6.84	7.23	7.37	6.63	6.65	6.84	6.84
DSO	days	56.68	50.50	49.94	54.03	57.78	60.33	59.96	57.25	62.21	63.17	63.44	58.44	57.65	53.38	50.52	49.50	55.07	54.90	53.37	53.40

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.44
= 56.68

The Days Sales Outstanding (DSO) ratio is a key indicator of how efficiently a company is managing its accounts receivable. A lower DSO indicates a faster turnover of accounts receivable and, therefore, a more efficient collection process. Conversely, a higher DSO suggests slower collections and potential liquidity issues.

In the case of Benchmark Electronics Inc, the DSO has fluctuated over the quarters from March 31, 2020, to December 31, 2024. The trend shows some variability, with DSO ranging from a low of 49.50 days in March 31, 2021, to a high of 63.44 days in June 30, 2022. Overall, the DSO has generally increased over the period, indicating a potential slowdown in the collection of accounts receivable.

It is noteworthy that the DSO increased significantly in the latter quarters of 2022 and early 2023, reaching levels above 60 days, which may raise concerns about the company's credit policies or the creditworthiness of its customers. Subsequently, there was a slight improvement in DSO in the latter part of 2023 and early 2024, dropping below 55 days.

The decrease in DSO in the last two quarters of 2024, with values of 49.94 days and 50.50 days, respectively, suggests a potential improvement in the collection process and efficiency in managing accounts receivable. However, it is essential for Benchmark Electronics Inc to monitor DSO closely to ensure timely collection of outstanding receivables and maintain healthy cash flows.

In conclusion, while there have been fluctuations in Benchmark Electronics Inc's DSO over the reviewed period, the recent decrease in DSO is a positive sign. Maintaining a reasonable DSO level is crucial for the company's financial health and liquidity management.