Enerpac Tool Group Corp (EPAC)
Days of sales outstanding (DSO)
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 6.13 | 5.35 | 5.12 | 5.86 | 5.20 | |
| DSO | days | 59.58 | 68.21 | 71.27 | 62.28 | 70.17 |
August 31, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.13
= 59.58
Days Sales Outstanding (DSO) is an important measure that indicates the average number of days a company takes to collect revenue after making a sale. A lower DSO is generally preferred as it signifies a shorter time frame for a company to convert its sales into cash.
Analyzing the trend of Enerpac Tool Group Corp's DSO from 2019 to 2023, it is observed that the DSO decreased from 70.17 days in 2019 to 59.58 days in 2023. This decline indicates an improvement in the company's ability to collect its accounts receivable more efficiently over the years.
The reduction in DSO is a positive sign, as it suggests that the company is managing its receivables more effectively, possibly through stricter credit policies, proactive collection efforts, or an improvement in customer payment behavior. This could lead to improved cash flows and working capital management for the company.
Overall, the decreasing trend in Enerpac Tool Group Corp's DSO demonstrates an enhancement in the efficiency of the company's accounts receivable management, which is a favorable indicator of its financial health and operational effectiveness.
Peer comparison
Aug 31, 2023