Foot Locker Inc (FL)
Days of sales outstanding (DSO)
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Receivables turnover | 50.99 | 54.76 | 66.76 | 60.81 | 80.02 | |
| DSO | days | 7.16 | 6.67 | 5.47 | 6.00 | 4.56 |
February 3, 2024 calculation
DSO = 365 ÷ Receivables turnover
= 365 ÷ 50.99
= 7.16
Days Sales Outstanding (DSO) is a financial ratio that indicates the average number of days it takes for a company to collect payment after making a sale. A lower DSO value is generally preferable as it suggests quicker collection of accounts receivable and better liquidity.
Analyzing the trend in Foot Locker Inc's DSO over the past five years, it is observed that there has been an increase in the DSO from 4.56 days in 2020 to 7.16 days in 2024. This suggests that the company is taking longer to collect payments from customers in recent years.
A higher DSO may indicate potential issues with accounts receivable management, such as slower collection efforts or difficulty in collecting payments from customers. It can also suggest lower efficiency in converting sales into cash, which could impact the company's liquidity and working capital management.
It is important for Foot Locker Inc to monitor and manage its DSO effectively to ensure timely collection of receivables and maintain optimal cash flow levels. By implementing strategies to improve credit policies, streamline collection processes, and closely monitor customer payment patterns, the company can work towards reducing its DSO and enhancing its overall financial performance.
Peer comparison
Feb 3, 2024