Duolingo Inc (DUOL)

Days of sales outstanding (DSO)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Receivables turnover		5.97	7.91	7.56
DSO	days	61.15	46.16	48.27

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.97
= 61.15

Duolingo Inc's Days of Sales Outstanding (DSO) provides insight into the average number of days it takes for the company to collect payments from its customers after making a sale. The trend in DSO over the past three years reveals fluctuations in the efficiency of the company's accounts receivable management.

In 2021, Duolingo's DSO stood at 48.27 days, indicating that, on average, it took the company around 48 days to collect payments from customers. This decreased to 46.16 days by the end of 2022, suggesting a slight improvement in collections efficiency. However, by the end of 2023, the DSO increased to 61.15 days, surpassing the previous year's levels.

The rise in DSO from 2022 to 2023 may indicate potential issues with the company's credit policies, collection practices, or the financial health of its customer base. A higher DSO could lead to cash flow challenges and impact the company's liquidity position.

Overall, Duolingo Inc's DSO trend suggests some instability in accounts receivable management efficiency, highlighting the importance of monitoring and addressing factors that could impact timely collections to maintain a healthy cash flow position.