Dolby Laboratories (DLB)
Days of sales outstanding (DSO)
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 2.60 | 3.15 | 3.58 | 3.88 | 4.79 | |
| DSO | days | 140.20 | 115.88 | 102.03 | 94.04 | 76.17 |
September 30, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 2.60
= 140.20
Days Sales Outstanding (DSO) is an important financial metric that measures the average number of days it takes for a company to collect revenue after making a sale. A higher DSO indicates that a company is taking longer to collect payment from customers, which can negatively impact cash flow and liquidity.
Analyzing Dolby Laboratories' DSO over the past five years reveals a consistent upward trend, indicating a potential deterioration in the company's ability to collect payments efficiently. In 2020, the DSO was at 76.17 days, but it has steadily increased to 140.20 days in 2024. This suggests that Dolby Laboratories may be experiencing challenges in managing its accounts receivable and collecting revenue in a timely manner.
The increase in DSO could be a result of various factors, such as changes in customer payment behavior, ineffective credit policies, or an increase in sales on credit terms. It is important for Dolby Laboratories to address this trend and implement strategies to improve its receivables management, such as tightening credit policies, enhancing collection procedures, and monitoring customer creditworthiness.
Overall, the rising DSO for Dolby Laboratories highlights the need for proactive measures to streamline its accounts receivable process and optimize cash flow management in order to maintain financial stability and operational efficiency.
Peer comparison
Sep 30, 2024