Commercial Metals Company (CMC)
Days of sales outstanding (DSO)
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 7.06 | 6.71 | 6.03 | 6.15 | 5.67 | |
| DSO | days | 51.68 | 54.37 | 60.50 | 59.30 | 64.38 |
August 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.06
= 51.68
Days Sales Outstanding (DSO) is a measure of how long it takes a company to collect payment on its sales. It is calculated by dividing accounts receivable by average daily sales.
Analyzing the DSO of Commercial Metals Co. over the past five years reveals a promising trend. The DSO has decreased from 63.63 days in 2019 to 51.44 days in 2023. This decline indicates that the company has been able to collect payments from its customers more efficiently over the years.
A decreasing DSO is generally a positive sign as it suggests that the company is managing its accounts receivable effectively and is able to convert sales into cash more quickly. It also indicates good credit control and a healthy working capital cycle.
Overall, the decreasing trend in DSO for Commercial Metals Co. reflects an improvement in its accounts receivable management, which may positively impact its cash flow and working capital management.
Peer comparison
Aug 31, 2023