Chesapeake Energy Corp (CHK)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		14.71	8.17	4.98	7.02	8.62
DSO	days	24.82	44.70	73.34	51.96	42.35

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 14.71
= 24.82

The Days of Sales Outstanding (DSO) ratio measures the average number of days it takes for Chesapeake Energy Corp to collect revenue after making a sale. A lower DSO indicates that the company is collecting payments more quickly, which may improve cash flow and efficiency in managing accounts receivable.

Analyzing the trend in Chesapeake Energy Corp's DSO over the past five years, we note fluctuations in the collection period. In 2023, the DSO decreased to 24.82 days from 44.70 days in 2022, signaling an improvement in the company's ability to collect payments promptly. This reduction may imply effective accounts receivable management, stronger customer relationships, or more efficient collection processes.

Comparing the 2023 DSO to historical data, it is notably lower than the DSO of 73.34 days in 2021 and 42.35 days in 2019, showcasing significant progress in tightening the collection period over the years. However, the DSO in 2020 was lower at 51.96 days compared to 2023, suggesting that further improvements can still be made to enhance the company's cash conversion cycle.

Overall, the declining trend in DSO for Chesapeake Energy Corp indicates a positive development in receivables management, potentially leading to improved liquidity and financial performance in the future. It is important for the company to continue monitoring and optimizing its accounts receivable processes to maintain efficient cash flow operations.