Cognizant Technology Solutions Corp Class A (CTSH)

Days of sales outstanding (DSO)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Receivables turnover		4.86	5.03	5.12	5.20	5.39
DSO	days	75.07	72.59	71.32	70.15	67.66

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.86
= 75.07

Cognizant Technology Solutions Corp Class A's Days Sales Outstanding (DSO) has exhibited a slightly increasing trend over the past five years. From 67.66 days at the end of 2020, the DSO increased to 70.15 days by the end of 2021, reflecting a moderately extended collection period for receivables. This trend continued with DSO reaching 71.32 days by the end of 2022, 72.59 days by the end of 2023, and 75.07 days by the end of 2024, indicating a gradual slowdown in receiving payments from customers.

A higher DSO value typically suggests that the company is taking a longer time to collect payments from its customers, which could impact its cash flow and liquidity position. It is essential for the company to monitor and manage its DSO effectively to ensure efficient working capital management and timely cash inflows. The increasing DSO trend observed over the years may warrant further investigation into the company's credit policies, customer payment behavior, and collection processes to address any potential issues impacting receivables turnover.