Costco Wholesale Corp (COST)

Days of sales outstanding (DSO)

		Sep 1, 2024	Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020
Receivables turnover		93.51	106.04	101.27	108.67	107.59
DSO	days	3.90	3.44	3.60	3.36	3.39

September 1, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 93.51
= 3.90

Days of Sales Outstanding (DSO) is a key metric used to assess 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 a sale has been made.

Analyzing the trend in Costco Wholesale Corp's DSO over the past five years, we observe a slight fluctuation in the metric. In September 2024, the DSO stood at 3.90 days, which represents a slight increase from the prior year's figure of 3.44 days in September 2023. This increase may indicate a potential delay in collecting payments from customers compared to the previous year.

Comparing the DSO for September 2024 with the DSO from the previous years, we can see that it is higher than the measures reported in August 2022, August 2021, and August 2020, which were 3.60 days, 3.36 days, and 3.39 days respectively. This trend suggests a potential deterioration in the efficiency of accounts receivable management in the most recent period.

Overall, it is essential for Costco Wholesale Corp to closely monitor and manage its DSO to ensure timely collection of receivables and maintain healthy cash flow operations. Any significant deviation from historical trends should be carefully examined to identify underlying issues that may impact the company's financial performance and liquidity position.