Costco Wholesale Corp (COST)

Days of sales outstanding (DSO)

		Sep 3, 2023	Aug 28, 2022	Aug 29, 2021	Aug 30, 2020	Sep 1, 2019
Receivables turnover		106.04	101.27	108.67	107.59	99.48
DSO	days	3.44	3.60	3.36	3.39	3.67

September 3, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 106.04
= 3.44

Days of Sales Outstanding (DSO) is a financial ratio that measures the average number of days it takes for a company to collect payment after a sale has been made. A lower DSO indicates that the company is able to collect payments more quickly, which can be a sign of efficiency in managing accounts receivable.

Looking at the DSO trend for Costco Wholesale Corp over the past five years, we observe a relatively consistent performance in this area. The DSO figures for the five years ending September 3, 2023, show a range from 3.36 days to 3.67 days, indicating that the company has been effective in collecting payments from its customers within a short period after making sales.

The slight fluctuations in DSO from year to year suggest that Costco has been able to maintain a relatively stable collection process despite any changes in economic conditions or company-specific factors. This consistency can be seen as a positive indicator of the company's ability to manage its accounts receivable efficiently.

In summary, the DSO figures for Costco Wholesale Corp over the past five years demonstrate a consistent and efficient collection process, indicating effective management of accounts receivable and a proficient credit and collection policy. This stability in DSO suggests that Costco has been successful in maintaining a strong financial position and efficient cash flow management.