Element Solutions Inc (ESI)
Days of sales outstanding (DSO)
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
---|---|---|---|---|---|---|
Receivables turnover | 5.59 | 5.05 | 5.59 | 4.88 | 4.60 | |
DSO | days | 65.31 | 72.24 | 65.26 | 74.86 | 79.43 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 5.59
= 65.31
The analysis of Element Solutions Inc.’s Days Sales Outstanding (DSO) over the specified period indicates notable fluctuations with an overall trend of improvement and subsequent stabilization. At the end of 2020, the DSO was approximately 79.43 days, reflecting the average number of days the company took to collect receivables. This figure decreased to 74.86 days in 2021, suggesting a modest improvement in the company's collections efficiency. The downward trend continued more significantly in 2022, with the DSO declining to 65.26 days, which indicates enhanced accounts receivable management and faster collections during that period.
However, there was a slight reversal in the trend by the end of 2023, where the DSO increased to 72.24 days. This uptick may suggest a temporary loosening in credit policies or challenges in receivable collections, leading to longer collection periods. Nonetheless, by the end of 2024, the DSO decreased again to 65.31 days, aligning closely with the 2022 figure. This final stabilization in DSO indicates that the company managed to regain control over its receivables collection process, maintaining an efficient credit and collections cycle over the last year observed.
Overall, the company demonstrated a significant improvement from the high DSO levels at the start of 2020, signifying enhanced credit management and cash flow efficiency. The brief increase in DSO in 2023 could be an area for further examination to understand underlying causes such as credit policy adjustments, customer payment behaviors, or economic factors impacting collections. The subsequent decline and stabilization in 2024 reflect a maintained focus on optimizing receivables collection processes, contributing positively to the company’s liquidity and working capital management.
Peer comparison
Dec 31, 2024