Chemed Corp (CHE)
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 | 12.48 | 13.24 | 18.18 | 14.07 | 15.31 | 17.50 | 15.68 | 18.26 | 15.59 | 18.03 | 17.20 | 19.96 | 16.39 | 18.66 | 15.25 | 14.79 | 13.48 | 16.37 | 13.50 | 15.10 | |
| DSO | days | 29.26 | 27.56 | 20.08 | 25.94 | 23.83 | 20.86 | 23.27 | 19.99 | 23.41 | 20.24 | 21.22 | 18.28 | 22.26 | 19.56 | 23.93 | 24.68 | 27.08 | 22.30 | 27.04 | 24.17 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 12.48
= 29.26
Chemed Corp.'s Days of Sales Outstanding (DSO) measures the average number of days it takes for the company to collect its accounts receivable. A lower DSO indicates that the company is collecting payments from customers more quickly, which is generally preferable as it improves cash flow.
From the data provided, we observe fluctuating DSO values throughout the quarters. In Q4 2023, the DSO stood at 29.26 days, representing a slight increase compared to the previous quarter, Q3 2023, which had a DSO of 27.56 days. This suggests that the company took slightly longer to collect payments from customers in Q4 2023.
Comparing the most recent quarters to the same quarters in the previous year, there is also a noticeable increase in DSO. For example, in Q4 2023, the DSO of 29.26 days is higher than the DSO of 23.83 days in Q4 2022, indicating a potentially less efficient collection process.
In contrast, Q2 2023 had the lowest DSO of 20.08 days during the period under review, signaling that Chemed Corp. was able to collect payments more quickly from customers in that quarter.
Overall, it is essential for Chemed Corp. to closely monitor its DSO trends, especially when they experience increases, to ensure efficient management of accounts receivable and maintain healthy cash flow levels.
Peer comparison
Dec 31, 2023