Embecta Corp (EMBC)

Days of sales outstanding (DSO)

		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
Receivables turnover		5.41	7.01	5.84	7.31	7.73	8.44
DSO	days	67.46	52.07	62.48	49.96	47.20	43.25

December 31, 2023 calculation

DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.41
= 67.46

Days Sales Outstanding (DSO) measures the average number of days it takes for a company to collect payment after making a sale. A lower DSO indicates that the company is collecting payments more quickly, which is generally considered favorable as it improves cash flow and liquidity.

Looking at the historical trend for Embecta Corp's DSO, we can see some fluctuations over the past few quarters. The DSO has ranged from a low of 43.25 days in September 2022 to a high of 67.46 days in December 2023.

In general, a decreasing trend in DSO is positive, as it indicates that the company is improving its collection process and possibly tightening credit policies. On the other hand, an increasing trend in DSO could signal potential issues with collections or a shift in customer payment behavior.

It would be important for Embecta Corp to analyze the reasons behind the fluctuations in DSO and take actions to ensure efficient collection of receivables. This could involve improving credit assessment processes, monitoring payment terms with customers, and implementing effective collection strategies to maintain a healthy cash flow position.

Overall, a fluctuating DSO trend for Embecta Corp suggests variability in its collection efficiency, emphasizing the need for continuous monitoring and management of accounts receivable to optimize cash flow and financial performance.