Catalyst Pharmaceuticals Inc (CPRX)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		7.44	20.52	21.28	19.89	9.71
DSO	days	49.05	17.79	17.15	18.35	37.59

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.44
= 49.05

To analyze Catalyst Pharmaceuticals Inc's Days Sales Outstanding (DSO) over the past five years, we can observe a fluctuating trend in their collection period for accounts receivable.

In 2019, the DSO was relatively high at 37.59 days, indicating the company took around 38 days, on average, to collect its accounts receivable. This could potentially raise concerns about the efficiency of their credit and collection policies.

However, in 2020, there was a significant improvement as the DSO decreased to 18.35 days, suggesting the company managed to collect payments more quickly compared to the previous year. This improvement could signify better credit management practices or a more streamlined accounts receivable process.

The trend continued in 2021 and 2022, with DSO remaining low at 17.15 days and 17.79 days, respectively. A low DSO indicates that Catalyst Pharmaceuticals Inc has been efficient in collecting payments, possibly enhancing their cash flow and liquidity position.

However, in 2023, the DSO increased to 49.05 days, significantly higher than the previous year. This surge might raise concerns about the company's accounts receivable management or the creditworthiness of its customers, potentially impacting their cash flow and working capital efficiency.

In conclusion, while Catalyst Pharmaceuticals Inc showed improvements in managing their collection period over the years, the sudden increase in DSO in 2023 warrants further investigation to determine the underlying reasons and assess the potential impact on their financial performance and liquidity.