Dropbox Inc (DBX)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		33.06	38.70	40.24	41.54	37.64
DSO	days	11.04	9.43	9.07	8.79	9.70

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 33.06
= 11.04

Days of Sales Outstanding (DSO) is a key financial ratio that measures the average number of days it takes for a company to collect payment after making a sale. A lower DSO indicates that a company is able to collect payments from customers more quickly, which is generally favorable as it ensures a healthy cash flow and liquidity position.

Analyzing Dropbox Inc's DSO over the past five years, we can observe a slight increase in DSO from 8.06 days in 2019 to 10.02 days in 2023. This increase may indicate a potential slowdown in the company's accounts receivable collection process, which could have implications for its cash flow management.

It is important for Dropbox Inc to closely monitor its DSO and implement strategies to efficiently manage its accounts receivable, such as improving credit policies, enhancing collection efforts, or offering incentives for early payment. By reducing DSO, the company can optimize its working capital and strengthen its financial position.

Overall, while an increase in DSO may raise concerns about liquidity and efficient cash flow management, it is essential for Dropbox Inc to address this trend proactively to maintain its financial health and operational effectiveness.