Commercial Metals Company (CMC)

Days of sales outstanding (DSO)

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Receivables turnover		7.48	7.02	7.06	7.41	7.43	7.27	6.71	6.37	6.76	6.62	6.02	5.63	6.18	6.25	6.17	6.32	6.07	6.12	5.68	5.46
DSO	days	48.81	52.01	51.68	49.24	49.12	50.19	54.40	57.34	53.98	55.14	60.63	64.78	59.06	58.41	59.20	57.77	60.17	59.60	64.21	66.80

February 29, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.48
= 48.81

The Days of Sales Outstanding (DSO) is a key financial ratio used to evaluate how efficiently a company is managing its accounts receivable. It indicates the average number of days it takes for a company to collect payment after making a sale.

Analyzing Commercial Metals Company's DSO over the past several periods reveals some insights. The trend of DSO shows fluctuations over time, with values ranging from a low of 48.81 days to a high of 66.80 days. Generally, a lower DSO is preferred as it suggests quicker collection of receivables and better liquidity management.

The DSO has shown some volatility, with peaks observed in May 2021 (66.80 days) and August 2022 (57.34 days), indicating potential challenges in efficiently collecting payments during those periods. Conversely, the lowest DSO was recorded in February 2024 (48.81 days), indicating improvements in collecting receivables efficiently.

It is crucial for Commercial Metals Company to monitor and manage its DSO effectively to ensure timely cash flows and minimize the risk of bad debts. By analyzing trends in DSO, the company can identify areas for improvement in its accounts receivable management processes to enhance overall financial performance and maintain healthy liquidity levels.