The Chefs Warehouse Inc (CHEF)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 10.15 | 9.83 | 10.02 | 11.32 | 8.99 | |
| DSO | days | 35.96 | 37.14 | 36.44 | 32.26 | 40.59 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.15
= 35.96
The Days of Sales Outstanding (DSO) is a key metric that indicates how efficiently a company is collecting its accounts receivable. A lower DSO implies that the company is collecting its receivables more quickly, which is generally favorable as it reduces the risk of bad debts and improves cash flow.
Analyzing The Chefs Warehouse Inc's DSO over the past five years, we observe fluctuations in the metric. In 2019, the DSO was relatively high at 40.59 days, indicating that the company took longer to collect its receivables that year. However, there was a significant improvement in 2020, with the DSO decreasing to 32.26 days, which suggests more efficient accounts receivable management.
The trend continued in 2021 and 2022, with DSO figures of 36.44 days and 37.14 days, respectively, indicating a slight increase in the time taken to collect receivables compared to the previous year. Notably, in 2023, the DSO decreased to 35.96 days, showing a slight improvement in the company's accounts receivable collection efficiency.
Overall, The Chefs Warehouse Inc's DSO has exhibited fluctuations over the past five years, with some improvements in efficiency observed in certain years. It is essential for the company to continue monitoring and managing its accounts receivable effectively to maintain healthy cash flow and financial stability.
Peer comparison
Dec 31, 2023