Dow Inc (DOW)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Receivables turnover		6.75	7.34	5.75	5.22	5.69
DSO	days	54.10	49.74	63.44	69.98	64.20

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.75
= 54.10

To analyze Dow Inc's days of sales outstanding (DSO), we can observe the trend over the past five years. DSO is a measure of the average number of days it takes for a company to collect revenue after a sale has been made.

From 2019 to 2020, DSO decreased from 64.20 days to 69.98 days, reflecting a less efficient collection of receivables. However, from 2020 to 2021, there was a significant improvement as DSO decreased to 63.44 days, indicating a quicker collection of sales. In 2022, there was a further improvement as DSO decreased to 49.74 days, signifying even more efficient collection practices. By the end of 2023, DSO reached 54.10 days, still showing an improvement from the previous year but slightly higher compared to 2022.

Overall, the trend indicates that Dow Inc has made progress in managing its receivables and improving its collection practices, leading to a shorter DSO. This can be a positive sign for the company's liquidity and cash flow management. However, it's essential to consider industry benchmarks and the company's specific circumstances when evaluating the effectiveness of its credit and collection policies.