Churchill Downs Incorporated (CHDN)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 18.35 | 18.95 | 14.75 | 12.27 | 25.67 | |
| DSO | days | 19.89 | 19.26 | 24.75 | 29.75 | 14.22 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 18.35
= 19.89
Churchill Downs, Inc.'s Days Sales Outstanding (DSO) measures the average number of days it takes for the company to collect payment from its customers. A lower DSO indicates quicker collection of receivables, which can signify efficient credit policies or a strong customer base that pays promptly. Conversely, a higher DSO may suggest potential issues with collecting payments promptly.
Examining Churchill Downs, Inc.'s DSO over the past five years, we observe fluctuations in the metric. In 2023, the DSO decreased to 17.72 days from 19.26 days in 2022, indicating an improvement in collecting payments from customers. This reduction could be a positive sign of enhanced collection efficiency or tightened credit policies.
Comparing the most recent DSO to 2019 and 2021, the company's DSO has still increased from the exceptionally low DSO of 14.22 days in 2019. This indicates that Churchill Downs, Inc. took longer to collect payments in the most recent year compared to 2019.
Further analysis is required to determine the reasons behind these fluctuations and whether they are attributable to changes in the company's customer base, credit terms, or collection processes. Monitoring and managing the DSO effectively is crucial for optimizing cash flow and maintaining a healthy liquidity position.