Cisco Systems Inc (CSCO)

Days of sales outstanding (DSO)

		Jul 27, 2024	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020
Receivables turnover		5.37	6.13	4.89	4.90	4.66
DSO	days	67.92	59.58	74.63	74.53	78.40

July 27, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.37
= 67.92

The Days of Sales Outstanding (DSO) is a measure that indicates how long it takes for a company to collect payment from its customers after making a sale. A lower DSO suggests that the company is efficient in collecting payments, while a higher DSO may indicate potential issues with accounts receivable management.

Analyzing the DSO for Cisco Systems Inc over the past five years, we can see that there has been some fluctuation in this metric:

1. As of July 27, 2024, the DSO stood at 67.92 days, which was higher compared to the previous year (59.58 days). This increase indicates that Cisco may be taking longer to collect payments from its customers, which could potentially impact its cash flow.

2. In the preceding year, July 29, 2023, the DSO was at 59.58 days, showing an improvement from the year before (74.63 days). A lower DSO suggests better efficiency in collecting payments.

3. However, in July 30, 2022, the DSO increased to 74.63 days, compared to the previous year (74.53 days). This uptick in DSO indicates that Cisco may have encountered challenges in collecting payments from its customers during that period.

4. Similarly, in July 31, 2021, the DSO was 74.53 days, slightly lower than the previous year (78.40 days). Despite the decrease, the DSO remained at a relatively high level, indicating a potential need for Cisco to focus on improving its accounts receivable management.

5. In July 25, 2020, the DSO was at 78.40 days, which was the highest among the five years analyzed. A high DSO suggests that Cisco may have faced difficulties in collecting payments efficiently during that period.

Overall, it is crucial for Cisco Systems Inc to closely monitor its DSO and work towards maintaining a balance between efficient collection of payments and maintaining strong customer relationships. fluctuations in the DSO can provide valuable insights into the company's financial health and operational efficiency in managing its accounts receivable.