Now Inc (DNOW)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.04 | 5.36 | 5.37 | 8.18 | 7.97 | |
| DSO | days | 60.44 | 68.11 | 67.99 | 44.61 | 45.78 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.04
= 60.44
The Days Sales Outstanding (DSO) of NOW Inc has shown some fluctuations over the past five years. In 2019 and 2020, NOW Inc had relatively low DSO of 45.76 days and 44.64 days, suggesting a quicker collection of accounts receivable. However, in 2021 and 2022, the DSO increased to 67.99 days and 68.01 days respectively, indicating a slowdown in the collection of receivables.
The DSO decreased to 60.39 days by the end of 2023, showing some improvement in the collection period compared to the previous two years. A decreasing trend in DSO generally reflects a more efficient management of accounts receivable, as the company is able to collect revenues from customers at a faster pace.
Overall, NOW Inc should continue to monitor its DSO closely to ensure timely collection of accounts receivable, which can impact the company's cash flow and working capital management. A lower DSO indicates better liquidity and efficiency in managing receivables, while a higher DSO may signify potential issues with credit policies or collection processes.
Peer comparison
Dec 31, 2023