Encompass Health Corp (EHC)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 7.62 | 7.78 | 9.61 | 7.79 | 8.77 | |
| DSO | days | 47.89 | 46.94 | 37.96 | 46.87 | 41.60 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 7.62
= 47.89
Encompass Health Corp's days of sales outstanding (DSO) measures the average number of days it takes for the company to collect payment after making a sale. Looking at the trend over the past five years, we see that DSO has fluctuated within a range.
In 2019, the DSO was 40.11 days, indicating a relatively efficient collection process. However, in subsequent years, there has been a slight increase in DSO. By 2023, the DSO had reached 46.50 days, reflecting a longer average collection period compared to the previous years.
The increase in DSO could be a sign of potential issues with the company's accounts receivable management or changes in customer payment behavior. It is essential for Encompass Health Corp to monitor and manage its DSO effectively to ensure timely collection of receivables and improve cash flow efficiency.
Peer comparison
Dec 31, 2023