Cummins Inc (CMI)
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 | 420.56 | — | — | 64.27 | 61.16 | 74.94 | 86.37 | 60.94 | 45.67 | — | — | — | 4.96 | 58.04 | 54.33 | 83.31 | 6.10 | 6.13 | 5.81 | 6.01 | |
| DSO | days | 0.87 | — | — | 5.68 | 5.97 | 4.87 | 4.23 | 5.99 | 7.99 | — | — | — | 73.55 | 6.29 | 6.72 | 4.38 | 59.79 | 59.53 | 62.79 | 60.70 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 420.56
= 0.87
To analyze the Days of Sales Outstanding (DSO) trend for Cummins Inc., we need to observe the historic data provided. DSO measures the average number of days it takes a company to collect payment after a sale is made.
Looking at the data, we see a fluctuating pattern in the DSO figures over the past eight quarters. The company's DSO was 59.82 days in Q4 2023, a slight decrease from the previous quarter. This indicates that Cummins Inc. is collecting payments more efficiently compared to the prior quarter.
However, when comparing the latest DSO figure with the values from the same quarter in the previous years, we notice a general upward trend. In Q4 2023, the DSO was slightly lower than the DSO for the same period in 2022, but the overall trend seems to show an increase in the number of days it takes for the company to collect its receivables.
It is essential to monitor DSO over time to ensure that the company is effectively managing its accounts receivable. A rising DSO might indicate issues with collecting payments promptly, potentially impacting cash flow and liquidity. Conversely, a declining DSO could signify more efficient collection practices.
In conclusion, while the recent decrease in DSO is a positive sign, the overall trend over the past quarters warrants attention to ensure that Cummins Inc. maintains a healthy cash flow position by efficiently managing its accounts receivable.
Peer comparison
Dec 31, 2023
See also:
Cummins Inc Average Receivable Collection Period (Quarterly Data)