Walt Disney Company (DIS)

Days of sales outstanding (DSO)

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Receivables turnover		7.21	6.54	5.04	5.15	4.50
DSO	days	50.62	55.83	72.37	70.94	81.18

September 30, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.21
= 50.62

Days Sales Outstanding (DSO) is a 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 the company is collecting payments more efficiently, while a higher DSO suggests that the company is taking longer to collect its accounts receivable.

Analyzing Walt Disney Co (The) DSO over the past five years, we observe a decreasing trend, which is generally a positive sign as it indicates improved efficiency in collecting payments from customers. In Sep 30, 2023, the DSO was 50.62 days, which is lower than the previous year's 55.83 days. This reflects a faster collection of receivables in the most recent period.

Efficient management of receivables is essential as it impacts the company's cash flow and working capital. A decreasing DSO can free up cash for the company, allowing it to reinvest or pay off debts.

However, it's important to consider the reasons behind the change in DSO. For example, a significant drop in DSO could be due to tightened credit terms, which might adversely affect sales in the long run. Conversely, a higher DSO may indicate lenient credit policies, potential issues with collections, or a shift in the company's customer base.

Overall, while a decreasing DSO indicates improved efficiency in collecting payments, it is crucial to analyze the underlying reasons and implications to ensure that it positively impacts the company's financial health and operations.