ESCO Technologies Inc (ESE)
Days of sales outstanding (DSO)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 4.77 | 5.18 | 4.89 | 5.06 | 4.68 | |
| DSO | days | 76.52 | 70.48 | 74.69 | 72.14 | 77.95 |
September 30, 2023 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 4.77
= 76.52
Days Sales Outstanding (DSO) is a key measure of a company's accounts receivable management effectiveness, indicating the average number of days it takes to collect revenue after a sale is made. Analyzing the trend in Esco Technologies, Inc.'s DSO over the past five years reveals some insights.
The DSO has fluctuated during this period, with a peak of 78.31 days in 2019 and a low of 70.08 days in 2022. The latest DSO of 75.81 days in 2023 indicates a slight increase compared to the previous year. This suggests that the company took longer to collect its receivables in 2023, which may raise concerns about its ability to efficiently convert sales into cash.
A rising DSO could be a sign of potential liquidity issues or challenges in collecting payments from customers. It is important for the company to assess and improve its credit and collection processes to shorten the DSO, thereby optimizing its working capital and cash flow.
Furthermore, a comparison with industry benchmarks and peer companies' DSO can provide additional context to evaluate Esco Technologies' performance and identify areas for improvement in its accounts receivable management.
Peer comparison
Sep 30, 2023