Carter’s Inc (CRI)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		15.84	15.86	14.81	15.91	14.02
DSO	days	23.04	23.01	24.65	22.94	26.03

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 15.84
= 23.04

To analyze Carter’s Inc days of sales outstanding (DSO) from 2019 to 2023, we observe a decreasing trend in the DSO metric over the years. The DSO decreased from 26.03 days in 2019 to 23.04 days in 2023. This indicates that Carter’s Inc has been more efficient in converting its accounts receivable into cash within a shorter period.

The improvement in DSO can suggest that the company has been effective in managing its credit and collections processes, resulting in faster cash inflows from sales. A lower DSO can also indicate better customer creditworthiness, efficient collections procedures, and tighter credit policies.

The consistent decrease in DSO from 2019 to 2023 reflects positively on Carter’s Inc's liquidity position and operating efficiency. However, it is essential to continue monitoring DSO to ensure that the trend persists and does not lead to potential issues such as overly stringent credit policies impacting sales growth.

Overall, the downward trend in DSO for Carter’s Inc indicates an improvement in the company's ability to collect receivables efficiently and manage its working capital effectively over the years.