CVS Health Corp (CVS)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 8.39 | 9.15 | 10.50 | 10.50 | 11.22 | |
| DSO | days | 43.50 | 39.91 | 34.78 | 34.76 | 32.52 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 8.39
= 43.50
Days of Sales Outstanding (DSO) is a key financial ratio that indicates the average number of days it takes for a company to collect payment after making a sale. The trend analysis of CVS Health Corp's DSO over the past five years shows a gradual increase in the collection period.
At the end of December 2020, CVS Health Corp had a DSO of 32.52 days, which slightly increased to 34.76 days by the end of December 2021. This trend continued with DSO reaching 34.78 days by the end of December 2022. However, there was a more significant increase in DSO to 39.91 days by the end of December 2023, indicating a longer collection period. By the end of December 2024, the DSO further increased to 43.50 days, highlighting a potential challenge in efficient receivables management.
The increasing trend in DSO indicates that CVS Health Corp may be experiencing challenges in collecting payments from customers promptly, which could impact its cash flow and working capital management. It is essential for the company to closely monitor its accounts receivable processes and implement strategies to shorten the collection period to improve liquidity and overall financial performance.
Peer comparison
Dec 31, 2024