DT Midstream Inc (DTM)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Receivables turnover | 5.33 | 5.71 | 4.86 | |
| DSO | days | 68.49 | 63.88 | 75.17 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.33
= 68.49
Days Sales Outstanding (DSO) measures the average number of days it takes for a company to collect payments after making a sale. A lower DSO indicates that the company is able to collect payments more efficiently and quickly, which is generally favorable.
Analyzing the trend in DSO for DT Midstream Inc over the past four years, we observe the following:
1. In 2023, the DSO was 66.90 days, indicating a slight increase from the previous year. This may suggest a moderate delay in collecting payments compared to the prior period.
2. In 2022, the DSO improved to 63.88 days, reflecting a more efficient collection of payments compared to the previous year. A decrease in DSO is generally positive as it signifies a faster cash conversion cycle.
3. In 2021, the DSO increased to 77.35 days, compared to the previous year. This suggests that the company took longer to collect payments in 2021, which may raise concerns about liquidity or the effectiveness of the company's credit policies.
4. In 2020, the DSO was significantly higher at 193.63 days, indicating a prolonged collection period. Such a high DSO could suggest potential issues with credit management, customer payment delays, or inefficiencies in the company's accounts receivable processes.
In conclusion, while DT Midstream Inc has shown fluctuating DSO figures over the past four years, there is a need to closely monitor and potentially improve its accounts receivable management practices to optimize cash flow and liquidity.
Peer comparison
Dec 31, 2023