Dow Inc (DOW)

Days of sales outstanding (DSO)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Receivables turnover		6.26	5.90	6.08	6.16	6.75	6.21	6.43	6.85	7.34	6.96	6.19	5.86	5.75	5.45	5.07	4.92	5.22	5.38	5.68	5.49
DSO	days	58.31	61.84	60.05	59.27	54.10	58.75	56.76	53.31	49.74	52.41	58.98	62.30	63.44	66.93	71.96	74.20	69.98	67.86	64.25	66.54

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.26
= 58.31

Days of Sales Outstanding (DSO) is a key metric that measures how long a company takes to collect payment after making a sale. A lower DSO indicates that a company is collecting payments more quickly, which can improve cash flow and liquidity.

Analyzing the DSO trend for Dow Inc based on the provided data shows that the company's DSO has exhibited some fluctuations over the periods. From March 31, 2020, to December 31, 2024, the DSO has generally decreased, with some minor fluctuations in between.

Starting at 66.54 days on March 31, 2020, the DSO decreased to 58.31 days by December 31, 2024. This trend indicates that Dow Inc has been able to improve its efficiency in collecting payments from customers over the years, which is a positive sign.

A decreasing DSO signifies that Dow Inc is managing its accounts receivable effectively, possibly through more efficient credit and collection processes. It may also suggest improved customer relationships and credit management, leading to faster payment cycles.

However, it is important to note that a DSO that is too low could indicate overly aggressive collections practices, potentially straining customer relationships. Therefore, a balanced approach to managing DSO is crucial for maintaining a healthy cash flow while preserving customer goodwill.

Overall, the decreasing trend in Dow Inc's DSO over the analyzed period reflects positively on the company's ability to efficiently convert sales into cash, contributing to better liquidity and financial health.