EMCOR Group Inc (EME)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 3.93 | 4.31 | 4.49 | 4.58 | 4.52 | |
| DSO | days | 92.93 | 84.61 | 81.25 | 79.75 | 80.79 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 3.93
= 92.93
DSO, or days of sales outstanding, measures how long it takes for a company to collect revenue after making a sale. Emcor Group, Inc.'s DSO has been increasing over the past five years, from 80.79 days in 2019 to 92.93 days in 2023. This trend suggests that the company is taking longer to collect payments from its customers, which could indicate potential issues with accounts receivable management or customer payment delays.
An increasing DSO can tie up cash flow and impact liquidity as the company waits for payments. It may also indicate potential credit risks with customers who are struggling to pay on time. Emcor Group, Inc. should closely monitor its DSO and consider implementing strategies to improve collections efficiency, such as offering discounts for early payments or tightening credit terms for customers with extended payment periods.
Peer comparison
Dec 31, 2023