Central Garden & Pet Company A (CENTA)
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) over the past five years, we calculated the average DSO for the company.
The DSO for the fiscal year ending Sep 30, 2023, was 36.71 days, compared to 41.19 days in 2022, 42.58 days in 2021, 53.05 days in 2020, and 45.97 days in 2019. It is evident that the DSO has decreased over the years, indicating an improvement in the efficiency of the company's accounts receivable collection process.
The reduction in DSO signifies that Central Garden & Pet Co. has been able to collect its accounts receivable more quickly, which may suggest an improvement in its credit and collection policies or an increase in the efficiency of its accounts receivable management. This is a positive signal, as lower DSO generally means the company is converting its sales into cash more effectively.
The decreasing trend in DSO is a favorable indication of the company's working capital management and liquidity. It demonstrates an efficient utilization of resources, potentially leading to improved cash flows and financial performance.
As such, the decreasing DSO of Central Garden & Pet Co. over the past five years reflects positively on the company's accounts receivable management and indicates operational efficiency in converting credit sales into cash.
Peer comparison
Sep 30, 2023