Black Hills Corporation (BKH)

Days of Sales Outstanding (DSO) is a crucial ratio that indicates the average number of days it takes for a company to collect payments from its customers. Analyzing Black Hills Corporation's DSO over the past five years reveals fluctuations in the efficiency of its accounts receivable management.

In December 31, 2020, the DSO stood at 61.39 days, indicating that on average, Black Hills Corporation took around two months to convert its accounts receivable into cash. This metric slightly increased to 63.61 days by December 31, 2021, suggesting a slight delay in collecting payments from customers.

By December 31, 2022, the DSO extended further to 75.21 days, signaling a significant increase in the average collection period. This could potentially indicate challenges in collecting payments promptly or changes in customer payment behaviors.

However, the trend reversed by December 31, 2023, when the DSO decreased to 57.74 days, showing improved efficiency in collecting receivables compared to the previous year. Nonetheless, by December 31, 2024, the DSO soared to 89.68 days, marking the highest level in the five-year period. This substantial increase might raise concerns about mounting accounts receivable balances or difficulties in collecting payments within a reasonable timeframe.

Overall, fluctuations in Black Hills Corporation's DSO highlight variations in its accounts receivable management efficiency over the years, warranting further investigation into the underlying factors affecting this ratio and strategies to optimize the collection process.

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Dec 31, 2024