Cars.com Inc (CARS)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 5.25 | 5.73 | 5.92 | 5.44 | 5.66 | |
| DSO | days | 69.46 | 63.69 | 61.71 | 67.07 | 64.49 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.25
= 69.46
The Days of Sales Outstanding (DSO) for Cars.com have shown a fluctuating trend over the past five years. In 2023, the DSO increased to 66.40 days from 60.25 days in 2022, indicating that it took Cars.com longer to collect revenue from its customers during the year. This increase is a deviation from the decreasing trend observed from 2021 to 2022.
Comparing the DSO in 2023 to that in 2021 and 2020, we see that it is higher, implying a potential deterioration in the efficiency of Cars.com's accounts receivable management. However, it is worth noting that the DSO in 2023 is still lower than that in 2020, suggesting some improvement in collection efficiency compared to the previous year.
Overall, a higher DSO indicates that Cars.com is taking longer to convert its sales into cash, which could impact its liquidity and working capital management. It is essential for the company to closely monitor and possibly improve its accounts receivable collection processes to reduce DSO and enhance its overall financial health.
Peer comparison
Dec 31, 2023