Central Garden & Pet Company (CENT)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 9.94 | 8.86 | 8.57 | 6.88 | 7.94 | |
| DSO | days | 36.71 | 41.19 | 42.58 | 53.05 | 45.97 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 9.94
= 36.71
To analyze Central Garden & Pet Co.'s days of sales outstanding (DSO), we should start by understanding the concept of DSO. DSO measures the average number of days it takes a company to collect payment after making a sale. A lower DSO is generally considered favorable as it indicates that the company is collecting payments from customers more quickly.
Looking at the historical DSO data for Central Garden & Pet Co., we observe a decreasing trend over the past five years. In 2023, the DSO stands at 36.71 days, which is an improvement from the previous year's 41.19 days. This suggests that the company has been able to collect payments more efficiently from its customers, indicating strong accounts receivable management.
The decrease in DSO could be attributed to various factors such as improved collection processes, better credit management, or a shift in customer payment behavior. A lower DSO can also positively impact the company's cash flows and working capital management.
Overall, the declining trend in DSO for Central Garden & Pet Co. demonstrates an improvement in its accounts receivable turnover and reflects positively on the company's ability to efficiently convert sales into cash. It's essential to continue monitoring DSO as it provides valuable insights into the company's credit and collection policies, and overall financial health.
Peer comparison
Sep 30, 2023