Cars.com Inc (CARS)

Days of sales outstanding (DSO)

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Receivables turnover		5.25	5.45	5.71	5.51	5.73	5.68	5.73	6.15	5.92	5.94	5.73	5.62	5.57	5.84	7.13	6.08	5.74	5.85	6.45	6.64
DSO	days	69.46	66.92	63.97	66.23	63.69	64.24	63.65	59.34	61.71	61.49	63.72	64.95	65.57	62.48	51.23	60.07	63.63	62.35	56.61	54.99

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.25
= 69.46

To analyze Cars.com's days of sales outstanding (DSO) trend, we observe fluctuations in the DSO metric over the past eight quarters. DSO represents the average number of days it takes for the company to collect revenue after making a sale.

The DSO for Q4 2023 increased to 66.40 days from 63.70 days in Q3 2023, indicating a longer time for the company to collect its sales revenue. This rise follows a general upward trend in DSO since Q2 2022. Despite the recent increase, the current DSO is still lower compared to the Q2 2022 peak of 60.78 days.

It's noteworthy that Cars.com experienced a significant improvement in DSO during Q1 2022 with 55.75 days, which was the lowest DSO over the analyzed period. However, the company has been slowly widening DSO since then.

Overall, the increasing trend in DSO suggests that Cars.com may be facing challenges in collecting sales revenue efficiently. Monitoring DSO closely and implementing strategies to accelerate collections could be beneficial for improving cash flow and liquidity in the future.