Fastenal Company (FAST)
Days of sales outstanding (DSO)
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Receivables turnover | 6.81 | 6.23 | 6.15 | 6.08 | 6.75 | 6.21 | 6.17 | 6.19 | 6.87 | 6.13 | 5.94 | 5.86 | 6.67 | 6.14 | 6.26 | 6.69 | 7.33 | 6.66 | 6.27 | 6.45 | |
| DSO | days | 53.61 | 58.58 | 59.31 | 60.02 | 54.08 | 58.77 | 59.17 | 58.92 | 53.09 | 59.58 | 61.45 | 62.24 | 54.75 | 59.44 | 58.30 | 54.58 | 49.78 | 54.78 | 58.25 | 56.55 |
December 31, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 6.81
= 53.61
Days of Sales Outstanding (DSO) is a financial metric that indicates the average number of days it takes for a company to collect revenue after a sale has been made. For Fastenal Company, analyzing the historical DSO data from March 31, 2020, to December 31, 2024, reveals fluctuating trends in the efficiency of its accounts receivable management.
The DSO for Fastenal varied between a low of 49.78 days on December 31, 2020, and a high of 62.24 days on March 31, 2022, indicating some variability in the company's collection process efficiency over time. Generally, lower DSO values suggest that the company is collecting its accounts receivable more quickly, which could be an indicator of strong cash flow management.
However, the increasing trend in DSO from the low of 49.78 days on December 31, 2020, to the peak of 62.24 days on March 31, 2022, followed by some fluctuations, raises concerns about the company's ability to efficiently collect revenue from its sales. A higher DSO can signal potential issues such as ineffective credit policies, slow-paying customers, or difficulties in collections processes.
Fastenal's DSO decreased to 53.61 days on December 31, 2024, which could indicate an improvement in its accounts receivable management compared to the peak DSO observed in March 31, 2022. However, it is essential for the company to continually monitor and manage its DSO to ensure timely collections and optimize cash flow.
In conclusion, analyzing Fastenal Company's DSO trend provides insights into the effectiveness of its accounts receivable management practices, with lower DSO values generally being more favorable. The company should focus on strategies to maintain a balance between efficient collections and maintaining positive customer relationships to support its financial health.
Peer comparison
Dec 31, 2024