DTE Energy Company (DTE)

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		0.22	0.27	0.22	0.20	0.25	3.05	6.64	8.73	8.81	9.80	8.28	8.92	8.40	8.28	7.95	7.68	6.80	7.72	6.80	6.99
DSO	days	1,638.46	1,369.17	1,629.46	1,847.88	1,475.69	119.73	55.00	41.82	41.42	37.25	44.10	40.91	43.46	44.08	45.88	47.55	53.71	47.27	53.68	52.22

December 31, 2024 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 0.22
= 1,638.46

The Days of Sales Outstanding (DSO) is a key metric used to evaluate how efficiently a company is managing its accounts receivable. It indicates the average number of days it takes for a company to collect payments from its customers after making a sale.

Analyzing the DSO trend of DTE Energy Company from March 31, 2020, to December 31, 2024, reveals some interesting insights.

Initially, the DSO was relatively stable in the low 50s, indicating the company was collecting payments within around 50 days. However, starting from September 30, 2023, there was a significant spike in DSO to 119.73 days, which continued to rise drastically to 1,475.69 days by December 31, 2023. These exceptionally high DSO figures are abnormal and could be indicative of potential issues such as credit problems, collection inefficiencies, or accounting errors.

The extremely high DSO continued into the following quarters, with DSO values ranging from 1,369.17 days to 1,847.88 days up until June 30, 2024. Such prolonged delays in collecting payments are alarming and may pose significant liquidity and cash flow challenges for DTE Energy Company.

It is crucial for the company to investigate and address the underlying reasons for the prolonged collection periods to avoid potential financial strain. Management should focus on improving credit policies, enhancing collection processes, and monitoring accounts receivable more closely to bring the DSO back to more normal levels.