Edgewell Personal Care Co (EPC)

Days Sales Outstanding (DSO) is a measure that indicates the average number of days a company takes to collect payment after making a sale. A lower DSO is generally preferred as it indicates faster collection of receivables and better liquidity management. Let's analyze the DSO trend for Edgewell Personal Care Co using the provided data.

From 2019 to 2023, Edgewell's DSO has shown a consistent decreasing trend. In 2019, the DSO was 43.39 days, and by 2023, it had decreased to 20.28 days. This steady reduction in DSO indicates an improvement in the company's ability to collect payments from its customers more efficiently over the years.

The decrease in DSO signifies that Edgewell has been managing its accounts receivable more effectively, possibly through stricter credit policies, more efficient collection processes, or improved customer payment practices. This trend is an encouraging sign of effective working capital management and increased liquidity for the company.

The improvement in DSO also suggests that Edgewell may have been successful in maintaining healthy customer relationships and minimizing credit risks. Additionally, a decreasing DSO can indicate strong sales, as customers are making payments more promptly, contributing to a positive impact on cash flows.

Overall, the decreasing trend in Edgewell's DSO over the five-year period shows the company's efforts to enhance its cash conversion cycle and manage its working capital efficiently, which can be seen as a positive indicator of its financial health and operational effectiveness.

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Sep 30, 2023