Eastman Chemical Company (EMN)
Days of sales outstanding (DSO)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 10.37 | 10.67 | 8.29 | 6.30 | 7.79 | |
| DSO | days | 35.19 | 34.22 | 44.04 | 57.90 | 46.88 |
December 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 10.37
= 35.19
Days Sales Outstanding (DSO) measures how long it takes for a company to collect its accounts receivable. A lower DSO indicates that the company is collecting payments more quickly, which is favorable for cash flow management.
Looking at the DSO trend for Eastman Chemical Co from 2019 to 2023, we observe fluctuations. In 2019, the DSO was 54.12 days, which increased significantly to 65.26 days in 2020, indicating a deterioration in the company's ability to collect receivables promptly. However, there was an improvement in 2021 as DSO decreased to 55.05 days.
The most recent data shows a further improvement in DSO to 45.73 days in 2023, which suggests that Eastman Chemical Co has managed to enhance its collections efficiency, possibly by implementing more effective credit and collection policies. This improvement is a positive sign as it indicates that the company is collecting payments from customers at a faster rate.
Overall, the downward trend in DSO from 2020 to 2023 reflects positively on Eastman Chemical Co's accounts receivable management, potentially leading to better cash flow performance and liquidity position.
Peer comparison
Dec 31, 2023