Badger Meter Inc (BMI)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 8.47 | 7.39 | 7.67 | 6.90 | 6.92 | |
| DSO | days | 43.07 | 49.42 | 47.59 | 52.92 | 52.78 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.47
= 43.07
The days of sales outstanding (DSO) metric measures how long it takes a company to collect payment from its customers after making a sale. A lower DSO value is desirable as it indicates a quicker collection of receivables, improving the company's cash flow efficiency.
Analyzing the trend in Badger Meter Inc.'s DSO over the past five years, we observe a general decreasing trend from 52.75 days in 2019 to 43.32 days in 2023. This decline indicates that the company has been improving its collection efficiency over the years, requiring fewer days to collect payment from customers.
The decrease in DSO from 2022 to 2023, from 49.47 days to 43.32 days, reflects a significant improvement in the company's accounts receivable collection process. This reduction suggests that Badger Meter Inc. has been managing its receivables more effectively in the most recent year, potentially due to tighter credit policies, enhanced collection efforts, or improved customer relationships.
Overall, the decreasing trend of DSO for Badger Meter Inc. signifies improved liquidity and working capital management. However, it is important for the company to continue monitoring and controlling its DSO to ensure efficient cash flow and financial stability in the future.
Peer comparison
Dec 31, 2023